The Effects of Performance Feedback, Past Temporal Orientation, and Interaction on R&D Intensity

Although the performance feedback model is a theory of organizational decision making conditional on a firm’s comparison of its performance with aspirations, the literature has neglected the role of decision makers’ cognitive traits in moderating the relationship. By drawing attention on a specific type of individual cognitive traits, past temporal orientation, this study attempts to integrate the performance feedback model with managerial cognition research. Content analysis on management’s discussion and analysis of financial condition and results of operation (MD&A) sections in form 10-K annual reports of the firms in the U.S. semiconductor industry revealed that management’s past temporal orientation not only directly decreases firms’ R&D intensity, but also weakens the negative effect of performance-aspiration discrepancy on R&D search.