Research On Dynamic Strategic R & D Investment Base On Value Chain

As the competition of markets is becoming more and more drastic, continuing innovation is believed to be the key for a firm to survive and development. And as the source of technological innovation, Research and Development (R&D) investment is becoming a mainly management content of firms. However, it is an important issue for managers that how to invest in R&D when facing drastic market competition. Domestic and foreign scholars have been studied this issue from different aspects, but there are two aspects be left. The first one is that the previous literatures ignoring the fact that the value relation can affect the firms'R&D investment, leading to the value relations and source of firms'value can not be understood well, which is not conducive for firms'to developing a long-term business strategy and achieve value added. The second one, previous literatures discussed this issue in a static framework. In reality, firms are in a dynamic environment and the value relations among firms always changes. In a dynamic environment, it can not to meet firms' needs of maximizing the value if studied the issues of R&D investment only from a static framework.Considered the inadequacy of existing literatures, this paper studied the issue of dynamic strategic R&D investment through differential game technology and base on the value chain theory.Firstly, this paper analyzed the value relationship among different firms base on value chain theory and that how the value relations affect firms R&D strategy. And we investigated 78 High-tech firms to recovery the motivations of why firms'managers choose different R&D strategy in reality.Secondly, base on different value relations, we present a differential game model and studied the game process and game strategy in the dynamic R&D investment from horizontal value chain and vertical value chain. And we compared the evolution path of quantity of R&D investment, the firms'profit and the total society value through linear numerical simulation.Finally, integrated the analysis results of horizontal and vertical strategic R&D investment, this paper discussed the issue of R&D investment base on value net, and we analyzed how the firms'R&D investment behavior under horizontal R&D cooperation strategy, vertical R&D cooperation strategy and independent R&D strategy affect the firms'profit and social value.The main conclusions of this paper as follows:Firstly, the firms'R&D strategies are trade-off of value creation relation and distribution relation among differential firms. And the main motivation of a firm to cooperate with others in R&D investment is searching for resource and technology complementarities, but the opportunism in R&D cooperation is the main reason for firms to choose independent R&D or differential cooperative government structure.Secondly, if the R&D cooperation can enhance the firms' technology ability, the firms'R&D investment will decrease but the firms'profit and the social value will increase accordingly. Moreover, the more technology ability if the R&D cooperation can bring to firms, the greater the effect mentioned above is.Thirdly, the transaction cost of R&D cooperation will reduce the motivation of cooperation and the society value. However, if the R&D cooperation can lead to monopoly, the transaction cost will not affect firms'R&D investment level. But if the R&D cooperation can not lead to monopoly, the transaction will reduce the motivation of R&D investment.Fourthly, with the R&D investment process evolve, the best R&D strategy of firms will change. When not consider the transaction costs, the cooperative R&D strategy can bring more profit and value to firms and society in long-term investment.