An assessment of the moderation effect of intellectual property rights on R&D capabilities and operation performance

Malaysian chemical and metallurgical manufacturing companies need to improve their operational performance. Since the world community has emphasised the importance of intellectual property rights (IPR) as a mechanism for companies to succeed in competing in the global arena, there is a strong urgency for them to strengthen their position by implementing better business strategies especially related to R&D capabilities. In this study, how IPR behaves as a moderator that
would stimulate R&D activities toward achieving positive growth of a company’s operating performance is investigated. Strengthening the IPR elements would produce benefits to the company since IPR has a significant impact on the overall
performance of the company. The relationship between R&D capabilities towards operational performance moderated by IPR has not been fully explored. In line with the property rights theories, this study focuses on how the internal R&D and external R&D related to operational performance of chemical and metallurgical manufacturing companies. Intellectual property rights (patent) would act as a moderating variable in the relationship between R&D capabilities towards
operational performance. By using the survey method, questionnaires were sent to 599 R&D and IP chemical and metallurgy manufacturing managers throughout Malaysia. 138 questionnaires were returned and 124 were usable. The findings showed that internal R&D, external R&D, and IPR gave a significant impact towards company operational performance. IPR was found to be moderating the relationship between internal and external R&D towards company operational
performance. Whereas, there was a significant impact between internal and external R&D for these three types of company namely local company, foreign company, and joint-venture company. Nevertheless, there was no significant impact between company operational performance and IPR in these three company types. Finally, the impacts of these findings to the R&D and IP managers for chemical and metallurgical manufacturing companies were discussed.