Amoroso, Sara Moncada-Paternò-Castello, Pietro Vezzani, Antonio
Year of Publication:
IPTS Working Papers on Corporate R&D and Innovation 01/2015
This paper provides the first empirical attempt of linking firms’ profits and investment in R&D revisiting Knight’s (1921) distinction between uncertainty and risk. Along with the risky profit-maximizing scenario, identifying a second, off-setting, unpredictable bias that leads to heterogeneous returns to R&D investments is crucial to fully understand the drivers of corporate profits.