University of Twente Student Theses
The Influence of the Exploration-Exploitation Ratio on Financial Success : Examining the Moderating Effects of R&D Time Investment and Strategic Communication
Zoeten, R.E. (2024) The Influence of the Exploration-Exploitation Ratio on Financial Success : Examining the Moderating Effects of R&D Time Investment and Strategic Communication.
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| Abstract: | This study investigates the impact of the exploration-exploitation (EE) ratio on companies' financial success and examines how R&D time investment and the advertising of R&D efforts moderate this relationship. Utilizing polynomial regression analysis on data from 80 companies, the research provides nuanced insights into the interplay between innovation strategies and financial performance. Results indicate that the EE ratio alone does not significantly predict financial performance; however, higher levels of R&D time investment significantly amplify the positive effects of exploration on financial outcomes (Model 3: Poly(ExRatio, 2), Estimate = 252.973, p < 0.01). Conversely, R&D advertisement was not found to significantly moderate this relationship (Models 2 and 4). The study highlights the importance of sustained R&D investments in driving financial success and suggests that resources might be better allocated towards substantive R&D activities rather than their advertisement. These findings underscore the need for companies to strategically balance exploration and exploitation activities while emphasizing substantial R&D efforts to optimize innovation outcomes and maintain competitive advantage. Future research should explore the temporal dynamics of these interactions and validate the findings across diverse industries and organizational contexts to enhance the generalizability and applicability of the results. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/100183 |
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