"R&D Spending Leap, Top Management Team Attention and Firm Performance: Evidence from China"

Research and development (R&D) is an important way for firms to obtain the competitive advantage. Studies showed that firm performance was not only affected by absolute quantity of R&D spending, also under the influence of relative changes of R&D spending. Based on the attention-based view of firm, using 5656 firm-quarter observations collected from 202 Chinese firms over 7 years between 2007 to 2013, combining event study method and the text analysis method, we empirically investigate the effect and mechanism of R&D spending leap on firm performance. Results show that R&D spending leap positively influences firm performance, and the top management team attention to ambidextrous innovation plays the mediating role in the relationship between R&D spending leap and firm performance. Namely, R&D spending leap only increases top management team attention to ambidextrous innovation at first, which can further effectively improve firm performance.