R&D Investment in the Global Paper Products Industry: A Behavioral Theory of the Firm and National Culture Perspective

Investing in R&D is particularly relevant for firms competing in today’s globalized knowledge-based economy. This multilevel study offers a national culture perspective integrated with the behavioral theory of the firm to test whether outperforming industry peers motivates subsequent R&D investment in a sample of paper products industry firms from 13 countries. We also hypothesize and find that home country cultural dimensions (institutional collectivism, power distance, and uncertainty avoidance) create a context that either encourages or discourages firm-level R&D investment. Additionally, we evaluate the cross-level moderating effects of culture to explore how the strength of the firm-level relationship between outperforming industry peers and R&D investment changes as a function of cultural context. Our multilevel analysis demonstrates outperforming industry peers and national culture are both important for explaining variance in firm-level R&D investment in the global paper industry.