English

Abstract

Innovation can be a key instrument to spur stronger economic activities in ASEAN countries. The majority of previous research was conducted in developed countries, which resulted in a phenomenon gap with emerging countries. Therefore, this paper examined the relationship between research & development (R&D) on the performance of ASEAN public firms. This study used panel data to examine 299 ASEAN public firms in 2019-2022. R&D intensity has a significant positive effect on ROA, but has no significant effect on Stock Return. R&D volatility does not affect firms’ performance. In the sub-sample analysis, diverse effects on both industries and countries, with the majority showing insignificant results. These results support previous studies that the internationalization of innovative activities by MNEs remains largely home-based (on developed countries), and innovations in emerging countries are part of MNEs international strategy. The author uses the concept of Global Value Chain (GVCs), MNEs internationalization strategy as the big picture of how R&D remains largely in developed countries, while emerging countries are largely market-based and R&D only a small part of customization. Future research to compare characteristics R&D developed and emerging countries and its effect on firm performance will further confirm this result.