Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210104 
Year of Publication: 
2016
Series/Report no.: 
Working Paper No. 15/2016
Publisher: 
Norges Bank, Oslo
Abstract: 
This paper quantifies the determinants of heterogeneity in R&D investment and its implications for growth. Using a panel of Norwegian manufacturing firms we document a negative correlation between R&D intensity and firm size, driven mainly by small firms with high R&D intensity. We estimate a Schumpeterian growth model with heterogeneous firms, that differ with respect to innovation efficiency. The estimated model fits the shape of the R&D investment distribution as well as the negative correlation between R&D intensity and firm size. A larger selection effect contribution to aggregate growth is found when we include R&D moments in the estimation. Finally, we study the link between firm heterogeneity and R&D subsidies, and show that the growth effects of subsidies depend crucially on how the policy influences the equilibrium distribution of firms.
Subjects: 
R&D
heterogeneous firms
subsidies
growth
JEL: 
L11
O3
O4
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-938-8
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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