Abstract:

Purpose- The purpose of this paper is to review roles played by firm’s internal R&D in stimulating operation performance of manufacturing firms moderated by intellectual property rights particularly patent in Malaysia.

Design-methodology/approach- The construct of this paper is based on comprehensive review of recent literatures on internal R&D and operation performance moderated by Intellectual property rights (patent). Detailed discussions follow to give implications in policy making especially government or related authorities in promoting and enforcing intellectual property rights.

Findings- Intellectual property rights policy especially regarding patents should be part of firm’s business strategy. Implementing IPR will safeguard firm’s new invention, innovation or processes in the long run. Furthermore, firm may gain benefits in creating new business opportunity during various patenting stages. 

Economic implications- Effective practice of internal R&D will give advantage to the firm in three different aspects namely ability to develop and grow critical human resources, dynamic involvement in the corporate R&D program and ability to connect information wise. Therefore, relationship between internal R&D and operation performance moderated by IPR, will encourage for betterment of firms in the future.

Originality/value- The environment and conditions for R&D activity have changed significantly in the last decade. It is reported that the average R&D intensity for non-S&P 500 firms rose from 2.3% in the 1980’s to 7.0% in the 2000’s. This shows that relatively how importance R&D investment that should be made by firm for their sustainability. This paper provides the importance of internal R&D towards operation performance of a firm moderated by intellectual property rights, as well as reviewing latest literatures from the perspectives of sustainability and innovation.