Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202165
Authors: 
Coad, Alexander
Grassano, Nicola
Year of Publication: 
2016
Series/Report no.: 
IPTS Working Papers on Corporate R&D and Innovation No. 03/2016
Abstract: 
Understanding causal relationships among key economic variables is crucial for policy makers, who wish to e.g. stimulate private R&D growth. To this end, we applied a technique recently imported from the Machine Learning community (Structural Vector Autoregressions (SVARs) identified using Independent Components Analysis (ICA)) to a set of the world’s largest R&D investors. Our analysis highlights the key role of sales growth, rather than profits growth, in stimulating R&D growth. R&D growth appears at the end of the causal ordering of the growth process. Our results suggest that policies to increase private R&D would do better to target sales rather than profits.
Subjects: 
R&D investment
firm growth
SVAR
sales growth
industrial dynamics
JEL: 
L25
O30
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.