R&D Organizational Structure, Knowledge Base Structure, and Firm’s Innovation Performance

Abstract

While existing literature on R&D organizational structure has primarily focused on the coordination of R&D activities, the critical role that R&D organizational structures play in facilitating knowledge integration remains underexplored. This study aims to address this gap by examining how different R&D organizational structures, specifically centralized versus decentralized frameworks, interact with the knowledge base, which encompass both breadth and depth of knowledge, to influence a firm’s innovation performance. Utilizing panel data from publicly listed manufacturing companies in China, our empirical analysis reveals that centralized R&D structures significantly strengthen the relationship between knowledge breadth and innovation performance. Conversely, decentralized R&D structures enhance the integration of deep knowledge, thereby reinforcing the connection between knowledge depth and innovation outcomes. This research contributes to the knowledge-based view by providing a more nuanced understanding of the organizational structures that foster effective knowledge integration. Additionally, it offers practical insights for firms aiming to align their R&D organizational structures with the specific attributes of their knowledge bases. JEL Classification: O32, L20.