Title: R&D intensity and allocation: empirical evidence from Indonesia in AEC integration

Authors: Akbar Adhiutama; Nurbudi Mulyono; Sita Deliyana Firmialy; Layung Anindya Prasetyanti

Addresses: School of Business and Management, Institut Teknologi Bandung, Jl. Ganesha 10 Bandung, Indonesia ' School of Business and Management, Institut Teknologi Bandung, Jl. Ganesha 10 Bandung, Indonesia ' School of Business and Management, Institut Teknologi Bandung, Jl. Ganesha 10 Bandung, Indonesia ' School of Business and Management, Institut Teknologi Bandung, Jl. Ganesha 10 Bandung, Indonesia

Abstract: To increase the competitiveness of ASEAN economy through ASEAN Economic Community (AEC), the role and strategy of R&D in spending alignment need to be revitalised. An understanding of the current R&D strategy of each AEC member country through the comprehensive analysis of R&D expenditure is also required. This paper addressed the issues of R&D expenditure and intensity in Indonesia that is currently placed at a relatively low position among other ASEAN members. The quantitative method was utilised to achieve the research objectives. The data, obtained from 228 companies of various sectors in Indonesia, were collected and integrated as the empirical basis for testing the hypotheses. The results suggested that although the growth opportunities and leverage have different effects on R&D intensity, the intensity effect is still very inadequate. Most companies allocated their R&D investment for internal purposes. They invested R&D expenditures to increase the efficiency of their companies even if it had low contribution to their company value.

Keywords: R&D intensity; R&D expenditure; Indonesia; Association of South East Asian Nations; ASEAN; ASEAN Economic Community; AEC.

DOI: 10.1504/IJSTM.2018.094443

International Journal of Services Technology and Management, 2018 Vol.24 No.5/6, pp.503 - 521

Received: 04 Oct 2016
Accepted: 15 Jun 2017

Published online: 25 Jul 2018 *

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