Drivers of R&D Investment: The Interaction of Behavioral Theory and Managerial Incentives



Date of this version


Document Type



R&D investment, Behavioral theory, Agency theory, Managerial incentives


This research explores the interaction of behavioral theory and agency theory, investigating their joint effects on firm-level R&D investment. Based on the logic of organizational routines driving R&D investment, we rely on the effects of organizational slack, performance relative to aspirations and distance from bankruptcy as the foundation for our research model. We argue that managerial incentives moderate the relationships between these behavioral theory variables and R&D investment, albeit in contrasting directions. Specifically, we hypothesize that stock option pay positively moderates these relationships while managerial stock ownership has a negative moderating effect. Using panel data for 573 publicly-traded manufacturing firms, we find support for several of our hypotheses, highlighting the interdependence of these two perspectives on R&D investment.

Published in

Journal of Business Research

Citation/Other Information

67(2), 151-158.