Yep, that's basically how it works. If you increase your damage resistance from 0% to 50%, you take half the damage which effectively doubles your shield strength.
A consequence of the damage reduction is that your effective shield recharge rate is increased as well:
- A 200 Mj shield with 0% resistances would take around 100 seconds to fully recharge.
- A 100 Mj shield with 50% resistances would be able to absorb the same amount of damage, but would only take 50 seconds to fully recharge.
Resistances from multiple sources are calculated as multiple damage multipliers - a 20% booster and a 30% booster would give you a damage multiplier of 0.8 * 0.7 = 0.56.
Beyond 50% resistance, there are diminishing returns - achieving 70% resistance is very hard, and 75% is mathematically impossible even if you had a million shield booster slots. In many cases, 50-60% is a good sweet spot.
Beware though that 40% of a Plasma Accelerator's damage ignores resistances. If you're relying purely on resistances for protection, you may find yourself very vulnerable towards PA armed enemies.
That's basically shields in a nutshell. My general rule of thumb is to get resistances (especially thermal) above 50%, and then stack shield strength after that.