How learning and legitimacy goals influence inter-firm imitation in R&D investment decisions

Much research has examined the drivers of firms’ R&D investments. However, many questions remain with respect to the role of R&D as a learning target and as a means of achieving legitimacy, particularly in the context of imitative R&D strategy. We develop a theory that integrates different explanations of why firms engage in imitation, highlighting efficiency-enhancing learning and legitimacy and focusing on firms’ R&D investment decisions. We argue that deviations in firm performance from social aspiration levels determine the salience of learning and legitimacy goals. Specifically, as performance moves from lying below to being above social aspiration levels, organizations gradually shift from a primary focus on learning vicariously from others’ R&D investments toward a focus on mimicking them to maintain legitimacy. An analysis of a sample of 2,081 Spanish manufacturing firms, as well as an online experiment with 863 participants from the manufacturing industry largely support our hypotheses. JEL CLASSIFICATION: D22, M10, O32