Time-Referent Strategic Effectiveness of Research and Development in Multinational Enterprises: An Empirical Study

In this article, it is established empirically that the strategic effectiveness of research and development (R&D) in multinational enterprises (MNEs) differs over different time periods. Two test time frames are proxied by Marshallian medium and long runs, constructed under a methodology where a shorter (respectively, longer) time period with less (respectively, more) scope for change is proxied by a shorter (respectively, longer) run with smaller (respectively, greater) logical capacity for change as defined by fewer (respectively, more) assignments of endogeneity against exogeneity to variables. Competition and growth analysis in Potter's strategic management paradigm is applied to operationalize these runs by matching exogenous-endogenous variable specifications. Paired-reduced form equations (PRFEs) are constructed under which strategic effectiveness of R&D in the same MNE, but referred to medium and long runs as represented and operationalized, are related to the same regressors referred to the two runs and with entry of corresponding same-sample data. A difference in runs is then argued to be the sole statistically identifiable source of differentiation between the PRFEs. Regression results demonstrating the equations' statistical validity are applied under an R2-based test to establish the empirical existence of run-referent, and hence, time-referent strategic effectiveness of R&D in MNEs. Managerial implications for technology-oriented firms represented by these institutions follow and are discussed.