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http://hdl.handle.net/10419/31852
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| Title: | | Firm growth and R&D expenditure  |
| Authors: | | Coad, Alexander Rao, Rekha |
| Issue Date: | | 2007 |
| Series/Report no.: | | Papers on economics and evolution 0710 |
| Abstract: | | We apply a panel vector autoregression model to a firm-level longitudinal database to observe the co-evolution of sales growth, employment growth, profits growth and growth of R&D expenditure. Contrary to expectations, profit growth seems to have little detectable effect on R&D investment. Instead, firms appear to increase their total R&D expenditure following growth in sales and growth of employment. In a sense, firms behave as if they aim for a roughly constant ratio of R&D to employment (or sales). We observe heterogeneous effects for growing or shrinking firms however, suggesting that firms are less willing to reduce their R&D levels following a negative growth shock than they are willing to increase R&D after a positive shock. |
| Subjects: | | Firm Growth Panel VAR R&D expenditure Industrial Dynamics |
| JEL: | | L20 L10 O32 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Papers on Economics and Evolution, MPI für Ökonomik
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