This study uses behavioral theory to examine how performance and slack affect R&D expenditures and innovation rates in 11 large Japanese shipbuilding firms from 1971 to 1996. The results show that: 1) R&D intensity increases when performance decreases relative to aspirations or when organizational slack increases. 2) The rate of launching innovations decreases when performance increases relative to aspirations, and this decrease is more rapid for higher performance above aspirations. 3) The study emphasizes including decision-making variables related to risk-taking when examining innovation, rather than only focusing on knowledge management.

1. A Behavioral Theory of R&D Expenditures and Innovations : Evidence from Shipbuilding -Henrich R. Greve Song, Junho Digital Contents Convergence, GSCST, SNU 26 May 2010

3. Organizational determinants of R&D and innovation

4. Method

5. Result

9. Organizational determinants of R&D and innovation

13. MeasuresDependent Variables - R&D intensity : R&D expenditures divided by sales - Innovation launches : number of innovations made by a firm as reported by Techno Japan Performance variables - ROA(return on assets) (ROS(return on sales), ROE(return on equity))

15. Results H2 H1

16. Results H3a H3b

17. Results

19. Innovation development cycle, because of not quick reacting

20. Researchers can predict what kinds of firms are likely to launch innovations that change the evolution of an industry