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JOURNAL OF STRATEGIC INNOVATION AND SUSTAINABILITY
Innovation Capital and Firm Performance: To Explore the Deferral
Effect and the Revisited Measurement
Author(s): Mu Shun Wang
Citation: Mu Shun Wang, (2011) "Innovation Capital and Firm Performance: To Explore the Deferral
Effect and the Revisited Measurement," Journal of Strategic Innovation and Sustainability, Vol. 7, Iss. 2, pp. 64 - 78
Article Type: Research paper
Publisher: North American Business Press
Abstract:
This paper analyzes the relationship, from 2000 to 2009, between corporate governance, innovation capital, and management performance in Taiwanese companies containing research and development (R & D) departments. For the analysis, panel data regression was used, which incorporated the random effect, while two-stage regressions were used to test the relationship. As is known, innovation capital is related to management performance and has a deferral effect. In this study, a new variable was chosen to express the concept of innovation capital and take advantage of the instrument variables of corporate governance, thereby supporting our hypothesis. Similar results are also obtained using a two-stage regression, which also incorporated the instrument variables of corporate governance. The results demonstrate that innovation capital has different outcomes, especially because independent directors have an influence on both innovation capital and management performance. Thus, through cross-sectional analysis, we suggest a new variable to estimate market performance, with measures of structural capital requiring redesign. Organizational capital was also found to have an influence on performance.
