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R&D Investment (r&d + investment)
Selected AbstractsIS CORPORATE R&D INVESTMENT IN HIGH-TECH SECTORS MORE EFFECTIVE?CONTEMPORARY ECONOMIC POLICY, Issue 3 2010RAQUEL ORTEGA-ARGILÉS This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data and on a unique micro-longitudinal database consisting of 532 top European R&D investors. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labor productivity; this general result is largely consistent with previous literature in terms of the sign, the significance, and the magnitude of the estimated coefficients. More interestingly, both at sectoral and firm levels the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium- and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and is the main determinant of productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support overall capital formation. [source] R&D INVESTMENT, CREDIT RATIONING AND SAMPLE SELECTIONBULLETIN OF ECONOMIC RESEARCH, Issue 2 2007Claudio A. Piga D45; G21; G32; E51 ABSTRACT We study whether R&D-intensive firms are liquidity constrained, by modelling their antecedent decision to apply for credit. This sample selection issue is relevant when studying a borrower,lender relationship, as the same factors can influence the decisions of both parties. We find firms with no or low R&D intensity to be less likely to request extra funds. When they do, we observe a higher probability of being denied credit. Such a relationship is not supported by evidence from the R&D-intensive firms. Thus, our findings lend support to the notion of credit constraints being severe only for a sub-sample of innovative firms. Furthermore, the results suggest that the way in which the R&D activity is organized may differentially affect a firm's probability of being credit constrained. [source] R&D INVESTMENTS AND SEQUENTIAL WAGE NEGOTIATIONS,AUSTRALIAN ECONOMIC PAPERS, Issue 3 2009JUAN CARLOS BÁRCENA-RUIZ This paper analyses how the structure of wage bargaining affects R&D investment by firms that increases the productivity of labour in a Cournot duopoly. We find that total expenditure on R&D is greater when wages are set simultaneously than when they are set sequentially. Thus sequential wage negotiations reduce the incentive for firms to innovate and affect the productivity of labour. When wage negotiations are sequential the productivity of labour is greater (lower) in the follower (leader) firm than when negotiations are simultaneous. We also obtain that for same parameter values it is possible for the firm with the lower productivity to end up paying a higher wage than the firm with the higher level of labour productivity. [source] IS CORPORATE R&D INVESTMENT IN HIGH-TECH SECTORS MORE EFFECTIVE?CONTEMPORARY ECONOMIC POLICY, Issue 3 2010RAQUEL ORTEGA-ARGILÉS This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data and on a unique micro-longitudinal database consisting of 532 top European R&D investors. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labor productivity; this general result is largely consistent with previous literature in terms of the sign, the significance, and the magnitude of the estimated coefficients. More interestingly, both at sectoral and firm levels the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium- and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and is the main determinant of productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support overall capital formation. [source] From R&D to Innovation and Economic Growth in the EUGROWTH AND CHANGE, Issue 4 2004Beñat Bilbao-Osorio ABSTRACT Over the last two decades many European governments have pursued ambitious research and development (R&D) policies with the aim of fostering innovation and economic growth in peripheral regions of Europe. The question is whether these policies are paying off. Arguments such as the need to reach a minimum threshold of research, the existence of important distance decay effects in the diffusion of technological spillovers, the presence of increasing returns to scale in R&D investments, or the unavailability of the necessary socio-economic conditions in these regions to generate innovation seem to cast doubts about the possible returns of these sort of policies. This paper addresses this question. A two-step analysis is used in order to first identify the impact of R&D investment of the private, public, and higher education sectors on innovation (measured as the number of patent applications per million population). The influence of innovation and innovation growth on economic growth is then addressed. The results indicate that R&D investment, as a whole, and higher education R&D investment in peripheral regions of the EU, in particular, are positively associated with innovation. The existence and strength of this association are, however, contingent upon region-specific socio-economic characteristics, which affect the capacity of each region to transform R&D investment into innovation and, eventually, innovation into economic growth. [source] Examining the link between price regulation and pharmaceutical R&D investmentHEALTH ECONOMICS, Issue 1 2005John A. Vernon Abstract This paper examines the link between price regulation and pharmaceutical research and development (R&D) investment. I identify two mechanisms through which price regulation may exert an influence on R&D: an expected-profit effect and a cash-flow effect. Using established models of the determinants of pharmaceutical R&D, I exploit a unique fact to quantify firm exposure to pharmaceutical price regulation: relative to the rest of the world, the U.S. pharmaceutical market is largely unregulated with respect to price. Using this fact within the context of a system of quasi-structural equations, I simulate how a new policy regulating pharmaceutical prices in the U.S. will affect R&D investment. I find that such a policy will lead to a decline in industry R&D by between 23.4 and 32.7%. This prediction, however, is accompanied by several caveats. Moreover, it says nothing about the implications for social welfare; therefore, these issues are also discussed. Copyright © 2004 John Wiley & Sons, Ltd. [source] Is Europe Becoming the Most Dynamic Knowledge Economy in the World?JCMS: JOURNAL OF COMMON MARKET STUDIES, Issue 3 2005DANIELE ARCHIBUGI The article discusses the condition and perspective of the European Union in the knowledge economy and the feasibility of the goal given by the European Council at the summits held in Lisbon (March 2000) and Barcelona (March 2002), that is, to increase European R&D expenditure to 3 per cent of GDP by 2010. The article focuses on two aspects: comparative performance with its direct counterparts, in particular the USA; and intra-European distribution of resources and capabilities. A set of technological indicators is presented to show that Europe is still consistently behind when compared to Japan and the US, especially in R&D investment and the generation of innovations. A small convergence occurs in the diffusion of information and communication technologies (ICTs), the sector most directly linked to the concept of the,new economy'. In the field of knowledge collaboration, Europe takes opposing paths in the business and academic worlds. Within Europe, the level of investment in scientific and technological activities is so diverse across countries that it does not merge into a single continental innovation system. [source] R&D and subsidies at the firm level: an application of parametric and semiparametric two-step selection modelsJOURNAL OF APPLIED ECONOMETRICS, Issue 6 2008Katrin Hussinger This paper analyzes the effect of public R&D subsidies on firms' private R&D investment per employee and new product sales in German manufacturing. Parametric and semiparametric two-step selection models are applied to this evaluation problem. The results show that the average treatment effect on the treated firms' R&D intensity is positive. The estimated effects are robust with respect to the different selection models. Further results show that publicly induced R&D spending is as productive as private R&D investment in generating new product sales. Copyright © 2008 John Wiley & Sons, Ltd. [source] Private-sector investment in R&D: a review of policy options to promote its growth in developing-country agricultureAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2010Anwar Naseem Technological innovation is vital to enhancing agricultural productivity and reducing poverty in many developing countries. Public investment in research and development has historically driven technological change in agriculture; however, recent trends suggest that the private sector may play a larger role in the future. Although there is optimism about the private sector's ability to generate new technologies relevant to developing-country agriculture, current levels of private investment remain low. The authors examine the determinants of private R&D investment in developing-country agriculture, the market, and institutional constraints that limit the growth of investment, and incentives that can promote more rapid investment growth. [EconLit classification: O300, Q160]. © 2010 Wiley Periodicals, Inc. [source] R&D and Tobin's q in an emerging financial market: the case of the Athens Stock ExchangeMANAGERIAL AND DECISION ECONOMICS, Issue 5 2010Efstathios G. Parcharidis This paper aims at providing further evidence on the consequences of R&D investment on Tobin's q for firms publicly traded in an emerging financial market. Panel data methodology is applied using data for the manufacturing and computer firms listed in the Athens Stock Exchange, a market classified as emerging by the major securities analysts, for the period 1996,2004. The empirical findings show first, that the Greek firms' R&D investment effect on the market value of a firm is consistent with other US and European studies. Second, the impact of the R&D investment on the market value is higher for small firms. The findings of this paper may have significant industrial and technological policy implications for other emerging markets sharing similar characteristics to Greece. Copyright © 2010 John Wiley & Sons, Ltd. [source] R&D investment as a signal in corporate takeoversMANAGERIAL AND DECISION ECONOMICS, Issue 5 2009M. Pilar Socorro The purpose of this paper is to analyze the effects that takeover threats have on firms' preacquisition R&D intensity. Critics of takeovers usually argue that takeover threats may reduce target firms' R&D investments. However, I find that target firms may increase R&D investment in order to signal their compatibility with the acquiring firm. The identity of the acquired firm depends on the market size and target firms' efficiency and compatibility. Through R&D investments, target firms may affect this result, signaling potential outsiders the kind of competition they may face, and forcing them to accept lower takeover offers. Copyright © 2009 John Wiley & Sons, Ltd. [source] Is R&D investment in lagging areas of Europe worthwhile?PAPERS IN REGIONAL SCIENCE, Issue 3 2001Theory, empirical evidence R&D, technology; spillovers; economic growth; regions; Western Europe Abstract. Is R&D investment in lagging areas worthwhile? There is no simple answer, nor is there universal theoretical agreement on the question. The Schumpeterian strand of the endogenous growth approach highlights the advantages of spatially concentrating the research and development (R&D) effort in a few areas, in order to maximise external economies and technological spillovers. Innovation is then expected to spill over from these technologically advanced areas into neighbouring regions. The neoclassical view, in contrast, considers that decreasing returns render investment in core areas increasingly less efficient, and makes investment in peripheries more effective. The regional policy view holds that public investment in R&D in lagging regions triggers economic convergence, because it limits congestion in the centre, helps to keep talent, and generates spin-offs in lagging areas. This article surveys these strands and highlights the advantages and disadvantages of investing in R&D in lagging regions. I then turn to the evolution of R&D investment across regions in Western Europe. [source] Optimal Structure of Technology Adoption and Creation: Basic versus Development Research in Relation to the Distance from the Technological Frontier,ASIAN ECONOMIC JOURNAL, Issue 3 2009Joonkyung Ha O31; O47 Many economists maintain that in order to advance economic growth Asian countries should focus more on basic research than on technology adoption, and more on the supply of skilled workers than the supply of unskilled workers. In this context, this paper presents a theoretical model and empirical evidence to explain the observation that a country in which the level of technology approaches the technology frontier tends to rely more on technology creation than adoption, and invest more in basic research than in development. The model shows that technology creation involves both basic and development research processes, whereas technology adoption uses only the latter process. Therefore, R&D investment in our model involves three different processes: basic research in technology creation, development in technology creation, and development in technology adoption. The results suggest first that the rate of growth is positively correlated with the level of basic research activities in the technology creation sector, if a country's technology gap with the technology frontier is small enough. Second, an increase in the efficiency of the education system for highly skilled workers raises the level of basic research and the rate of growth. Third, verifying these theoretical results, empirical analyses using panel data from Korea, Japan and Taipei, China show that the narrower the distance to the technological frontier, the higher the growth effect of basic R&D, which indicates that the share of basic R&D matters for economic growth. Finally, the results also show that the quality of tertiary education has a significantly positive effect on the productivity of R&D. [source] R&D INVESTMENTS AND SEQUENTIAL WAGE NEGOTIATIONS,AUSTRALIAN ECONOMIC PAPERS, Issue 3 2009JUAN CARLOS BÁRCENA-RUIZ This paper analyses how the structure of wage bargaining affects R&D investment by firms that increases the productivity of labour in a Cournot duopoly. We find that total expenditure on R&D is greater when wages are set simultaneously than when they are set sequentially. Thus sequential wage negotiations reduce the incentive for firms to innovate and affect the productivity of labour. When wage negotiations are sequential the productivity of labour is greater (lower) in the follower (leader) firm than when negotiations are simultaneous. We also obtain that for same parameter values it is possible for the firm with the lower productivity to end up paying a higher wage than the firm with the higher level of labour productivity. [source] Exploring the impact of R&D and climate change on agricultural productivity growth: the case of Western Australia,AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2010Ruhul A. Salim This article empirically examines the impact of R&D and climate change on the Western Australian Agricultural sector using standard time series econometrics. Based on historical data for the period of 1977,2005, the empirical results show that both R&D and climate change matter for long-run productivity growth. The long-run elasticity of total factor productivity (TFP) with respect to R&D expenditure is 0.497, while that of climate change is 0.506. There is a unidirectional causality running from R&D expenditure to TFP growth in both the short run and long run. Further, the variance decomposition and impulse response function confirm that a significant portion of output and productivity growth beyond the sample period is explained by R&D expenditure. These results justify the increase in R&D investment in the deteriorating climatic condition in the agricultural sector to improve the long-run prospects of productivity growth. [source] Trade policy mix: IPR protection and R&D subsidiesCANADIAN JOURNAL OF ECONOMICS, Issue 3 2006Moonsung Kang Abstract This paper analyses strategic R&D policy under circumstances where intellectual property rights protection resulting from firms' R&D investment is not perfect. By examining policy choices wherein a government chooses both R&D subsidies and IPR protection levels simultaneously, we show that it is optimal for a government to adopt sufficiently weak IPR protection and to subsidize R&D investments of domestic firms. Inducing R&D investment of foreign rival firms will increase the profits of domestic firms. Ce mémoire analyse une politique stratégique de R&D quand la protection des droits de propriété intellectuelle (DPI) qui découlent d'investissements en R&D par les entreprises est imparfaite. En examinant les choix de politiques par lesquels un gouvernement définit simultanément les niveaux de subventions pour la R&D et de protection de la propriété intellectuelle, on montre qu'il est optimal pour un gouvernement d'adopter une protection des DPI suffisamment faible et de subventionner les investissements en R&D des entreprises nationales. Susciter un accroissement des investissements en R&D des entreprises étrangères rivales devrait augmenter les profits des entreprises nationales. [source] From R&D to Innovation and Economic Growth in the EUGROWTH AND CHANGE, Issue 4 2004Beñat Bilbao-Osorio ABSTRACT Over the last two decades many European governments have pursued ambitious research and development (R&D) policies with the aim of fostering innovation and economic growth in peripheral regions of Europe. The question is whether these policies are paying off. Arguments such as the need to reach a minimum threshold of research, the existence of important distance decay effects in the diffusion of technological spillovers, the presence of increasing returns to scale in R&D investments, or the unavailability of the necessary socio-economic conditions in these regions to generate innovation seem to cast doubts about the possible returns of these sort of policies. This paper addresses this question. A two-step analysis is used in order to first identify the impact of R&D investment of the private, public, and higher education sectors on innovation (measured as the number of patent applications per million population). The influence of innovation and innovation growth on economic growth is then addressed. The results indicate that R&D investment, as a whole, and higher education R&D investment in peripheral regions of the EU, in particular, are positively associated with innovation. The existence and strength of this association are, however, contingent upon region-specific socio-economic characteristics, which affect the capacity of each region to transform R&D investment into innovation and, eventually, innovation into economic growth. [source] Process and product innovation: A differential game approach to product life cycleINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 2 2010Luca Lambertini C73; D43; D92; O31 We investigate the timing of adoption of product and process innovation using a differential game where firms may invest in both activities. We consider horizontal product innovation that reduces product substitutability, and process innovation that reduces marginal cost. First, we demonstrate that the incentive for cost-reducing investment is relatively higher than the incentive to increase product differentiation. Second, depending on initial conditions: (i) firms activate both types of investment from the very outset to the steady state; (ii) firms initially invest in only one R&D activity and then reach the steady state either carrying out only this activity or carrying out both; or (iii) firms do not invest at all in either type of innovation. Comparing R&D investments under Cournot and Bertrand behavior shows that quantity competition entails lower R&D incentives than price competition in both directions. [source] Exploring strategic priorities for regional agricultural R&D investments in East and Central AfricaAGRICULTURAL ECONOMICS, Issue 2 2010Liangzhi You O13; O32; O55; Q16 Abstract The 11 countries of East and Central Africa have diverse but overlapping agroclimatic conditions, and could potentially benefit from spillovers of agricultural technology across country borders. This article uses high-resolution spatial data on actual and potential yields for 15 major products across 12 development domains to estimate the total benefits available from the spread of new agricultural technologies around the region. Market responses and welfare gains are estimated using the,Dynamic Research Evaluation for Management,model, taking account of current and future projections of local and international demand. Results suggest which crops, countries, and agroclimatic regions offer the largest total benefits. Downloadable data and program files permit different assumptions and additional information to be considered in the ongoing process of strategic priority setting. [source] Does the Capitalization of Development Costs Improve Analyst Forecast Accuracy?JOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 1 2010Evidence from the UK It has been documented that investments in Research and Development (R&D) are associated with increased errors and inaccuracy in earnings forecasts made by financial analysts. These deficiencies have been generally attributed to information complexity and the uncertainty of the future benefits of R&D. This paper examines whether the capitalization of development costs can reduce analyst uncertainty about the future economic outcome of R&D investments, provide outsiders with a better matching of future R&D-related revenues and costs, and therefore promote accuracy in analyst forecasts. UK data is used, because accounting rules in the United Kingdom permitted firms to conditionally capitalize development costs even before the introduction of the International Financial Reporting Standards. The choice to expense R&D rather than conditionally capitalize development costs is found to relate positively to signed analyst forecast errors. This finding is robust to controlling for the influence of other factors that may affect errors, as well as for the influence of R&D investments on forecast errors. The decision to capitalize versus expense is not observed to have a significant influence on analyst forecast revisions. The findings are interpreted as evidence that the choice to capitalize as opposed to expense may help to reduce deficiencies in analyst forecasts; hence, is informative for users of financial statements. Increased informativeness is expected to have repercussions for the effectiveness with which analysts produce earnings forecasts, and, as a result, market efficiency. [source] R&D investment as a signal in corporate takeoversMANAGERIAL AND DECISION ECONOMICS, Issue 5 2009M. Pilar Socorro The purpose of this paper is to analyze the effects that takeover threats have on firms' preacquisition R&D intensity. Critics of takeovers usually argue that takeover threats may reduce target firms' R&D investments. However, I find that target firms may increase R&D investment in order to signal their compatibility with the acquiring firm. The identity of the acquired firm depends on the market size and target firms' efficiency and compatibility. Through R&D investments, target firms may affect this result, signaling potential outsiders the kind of competition they may face, and forcing them to accept lower takeover offers. Copyright © 2009 John Wiley & Sons, Ltd. [source] Potential Payoff from R&D in the Coconut Industry of North Sulawesi, IndonesiaASIAN ECONOMIC JOURNAL, Issue 1 2010Benjamin Henderson D58; O13; O18 The coconut industry of North Sulawesi, one of the primary coconut-producing provinces of Indonesia, is dominated by a small number of products that are primarily exported overseas. As they only comprise a small share of the global coconut product export market, demand for coconut products from North Sulawesi is generally very elastic. Conversely, the supply of coconuts is highly inelastic, especially in the short to medium term. Hence, small shifts in supply and demand lead to large fluctuations in farmer incomes. In this context, an equilibrium displacement model is used to examine the intra-industry consequences of R&D investments in farm productivity and product development. These investments are assessed in terms of the producer surplus benefits that they generate. [source] Trade policy mix: IPR protection and R&D subsidiesCANADIAN JOURNAL OF ECONOMICS, Issue 3 2006Moonsung Kang Abstract This paper analyses strategic R&D policy under circumstances where intellectual property rights protection resulting from firms' R&D investment is not perfect. By examining policy choices wherein a government chooses both R&D subsidies and IPR protection levels simultaneously, we show that it is optimal for a government to adopt sufficiently weak IPR protection and to subsidize R&D investments of domestic firms. Inducing R&D investment of foreign rival firms will increase the profits of domestic firms. Ce mémoire analyse une politique stratégique de R&D quand la protection des droits de propriété intellectuelle (DPI) qui découlent d'investissements en R&D par les entreprises est imparfaite. En examinant les choix de politiques par lesquels un gouvernement définit simultanément les niveaux de subventions pour la R&D et de protection de la propriété intellectuelle, on montre qu'il est optimal pour un gouvernement d'adopter une protection des DPI suffisamment faible et de subventionner les investissements en R&D des entreprises nationales. Susciter un accroissement des investissements en R&D des entreprises étrangères rivales devrait augmenter les profits des entreprises nationales. [source] | ||||||||||||||||||||||||||||