Sahrom, Nurul Shamisza and Cheng , Ling Tan and Yahya, Sofri
(2016)
Regulation, Incentives And Government
Policy: How Does It Stimulate R&d Engineers'
Innovative Behaviours In Malaysian
Biotechnology Smes?
Asian Academy of Management Journal (AAMJ), 21 (1).
pp. 1-25.
ISSN 1394-2603
Abstract
This study seeks to examine the relationship between regulation, incentives and government
policy to R&D (research and development) engineers' innovative behaviour in Malaysia
biotechnology SMEs. This research is empirical study where survey data was drawn from
218 R&D engineers in biotechnology SMEs in Malaysia. The data were analysed using
SmartPLS which is Structural Equation Modelling (SEM) tool. The result unfolds that
government policy is positively and signifcantly associated with innovative behaviour.
Nevertheless, regulation was found signifcant to innovative behaviour but demonstrates
negative magnitude. On the other hand, incentives was insignifcant to innovative
behaviour. This in turn suggests that government policy is critical to foster innovative
behaviour whereby the regulation enforcement that indicates disequilibrium possess
by higher compliance cost be a disincentive for the R&D engineers to act innovatively.
Contradict to previous studies, the insignifcant relationship between incentives and
individual innovative behaviour, possibly influence by lack of coordination, monitoring
and vetting system with regards to the incentives distribution.
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