Abstract
This study examines the outcomes of business-level product research and development intensity and their impact on return on investment under two business strategies: differentiation and cost leadership. Three different types of outcomes from product R&D spending are proposed: accounting, disruptive, and investment outcomes. These are described and are found to differ by strategy. In a cost leadership strategy, stronger disruptive and investment outcomes were found than in a differentiation strategy. The differentiation strategy, by comparison, had longer investment outcomes and greater stability of product R&D. Nevertheless, the investment outcomes were ephemeral for both strategies.
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