Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333776 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12230
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
This paper investigates whether investments in data affect firms' R&D and whether the two are productivity-enhancing complements. We conceptualise and test whether investments in data reduce market uncertainty, thereby mitigating the inherent uncertainty of R&D and enhancing research and innovation investment. Using Italian firm-level data from 2002 to 2024 and exploiting the GDPR as an instrument, we identify a positive causal effect of data on R&D investment. Moreover, we find that data and R&D are complementary in enhancing both short- and long-term productivity. Our analyses also identify a positive role of R&D for productivity only when firms are data-intensive.
Subjects: 
uncertainty
data
R&D
digitalisation
innovation
productivity
JEL: 
D22
D25
D82
O31
O33
Document Type: 
Working Paper
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