nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2010‒04‒17
twenty-one papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Heterogeneous Distributions of Firms Sustained by Innovation Dynamics – a model with an empirical application By Andersson, Martin; Johansson, Börje
  2. Is Corporate R&D Investment in High-tech Sectors more Efficient? Some Guidelines for European Research Policy By Raquel Ortega-Argilés; Maria-Cristina Piva; Lesley Potters; Marco Vivarelli
  3. Innovation input and innovation output: differences among sectors By Lesley Potters
  4. EU-US differences in the size of R&D intensive firms By Raquel Ortega-Argilés; Andries Brandsma
  5. Technological Regimes and the Variety of Innovation Behaviour. Creating Integrated Taxonomies of Firms and Sectors By Michael Peneder
  6. Importance of Technological Innovation for SME Growth - Evidence from India By Bala Subrahmanya, M. H.; Mathirajan, M.; Krishnaswamy, K. N.
  7. The global economic and financial downturn: What does it imply for firms' R&D strategies? By Peter Voigt; Pietro Moncada-Paternò-Castello
  8. Do External Technology Acquisitions Matter For Innovative Efficiency and Productivity? By Gantumur, Tseveen; Stephan, Andreas
  9. Is there complementarity or substitutability between internal and external R&D strategies? By Hagedoorn, John; Wang, Ning
  10. The Strategic Use of Architectural Knowledge by Entrepreneurial Firms By Carliss Y. Baldwin
  11. Pioneer burnout: Radical product innovation and firm capabilities By Christina Guenther
  12. The Performance of Top R&D Investing Companies in the Stock Market By Michele Cincera; Raquel Ortega-Argilés; Pietro Moncada-Paternò-Castello
  13. Determinants of Firms Cooperation in Innovation By Flavio Lenz-Cesar; Almas Heshmati
  14. How does knowledge matter patenting inventions? By Ana Pérez-Luño; Ramón Valle-Cabrera
  15. The impact of efficiency parameters on firms¡¯innovative activities: Evidence from Korean firm-level data By Seong-Sang Lee; Yeonbae Kim
  16. Does Europe perform too little corporate R&D? A comparison of EU and non-EU corporate R&D performance By Pietro Moncada-Paternò-Castello; Constantin Ciupagea; Keith Smith; Alexander Tübke; Mike Tubbs
  17. Innovation Frequency of Durable Complementary Goods By Yijuan Chen
  18. Innovation and the International Firm Structure: Theory and Evidence from German Firm-Level Data By Hansen, Thorsten
  19. The impact of innovation on labour productivity growth in European industries: Does it depend on firms' competitiveness strategies? By Francesco Bogliacino; Mario Pianta
  20. Business R&D in SMEs By Raquel Ortega-Argilés; Peter Voigt
  21. Measuring the Returns to R&D By Hall, Bronwyn H.; Mairesse, Jacques; Mohnen, Pierre

  1. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper develops a framework to appreciate the observed heterogeneity of firm size distributions and the entry and exit of products and firms associated with it. It is based on a model where new products are introduced by innovating firms in a quasi-temporal setting of monopolistic competition. The rate at which a firm innovates, according to a firm-specific Poisson process, is assumed to be influenced by the firm’s past experience and cumulated knowledge assets. The model assigns a fundamental role to entrepreneurship of existing and potential firms. The empirical analysis is based on detailed firm-level export data, which describes firm size in terms of products and markets, and firm dynamics in terms of changes in the supply pattern (varieties and markets) of existing firms in combination with entry/exit of firms. The empirical results are consistent with the model. First, the modeled innovation process imply a persistent distribution of heterogeneous firms. Second, the invariant size distribution of firms is associated with significant micro-dynamics, where firms continuously add and subtract varieties from their product mix, and new firms may enter while some exit. Third, an econometric analysis where firms’ introduction of new varieties is explained by firm attributes provides support for the assumption of a firm-specific and state-dependent stochastic innovation process.
    Keywords: innovation; firm heterogeneity; size distribution; entry; exit; dynamics;
    JEL: F12 L11 L26 O31
    Date: 2010–02–11
  2. By: Raquel Ortega-Argilés (JRC-IPTS); Maria-Cristina Piva (Universita Cattolica di Milano); Lesley Potters (JRC-IPTS); Marco Vivarelli (Universita Cattolica di Milano)
    Abstract: 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 over the period 1987-2002 and on a unique micro longitudinal database consisting of 532 top European R&D investors over the six-year period 2000-2005. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labour 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 it is the main determinant of the productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support the overall capital formation.
    Keywords: R&D, productivity, high-tech sectors, innovation and industrial policy
    JEL: O33
    Date: 2009–06
  3. By: Lesley Potters (JRC-IPTS)
    Abstract: This research investigates deals with the impact of various innovation activities on innovation output by using Spanish CIS3 data on 3,247 innovative firms and applying several Knowledge Production Functions. It is confirmed that different innovation activities lead to differences in both the propensity to innovate and innovation output, depending on the technological characteristics a firm has. In general, internal R&D leads to product innovation, while machinery acquisition leads to process innovation. Size, group belonging and protection of innovations are important determinants for innovation output, but show either a positive or negative relation, depending again on the firm's innovation strategy.
    Keywords: R&D, innovation, Knowledge Production Function, double sample selection
    JEL: O33
    Date: 2009–06
  4. By: Raquel Ortega-Argilés (JRC-IPTS); Andries Brandsma (JRC-IPTS)
    Abstract: The average firm size of the top R&D investors among US-based companies is smaller than that of the EU-based firms. Does this help to explain why the US has a greater R&D intensity, or is the higher firm size in the EU, just as its lower R&D intensity, determined by the sectors in which the top R&D investors are operating? Using data on the top-R&D investors from the 2006 EU Industrial R&D Investment Scoreboard, the size differential between R&D performers in the EU and US is more closely examined. A first observation is that, despite great differences between sectors, the overall distribution of companies' R&D investments in both economies is remarkably similar, as opposed to the distribution of the R&D/sales ratios of the same two sets of companies. The notion that size plays a role, independent of the sectoral composition of R&D, is then confirmed by regression analysis. In the US as well as in the EU, smaller sized Scoreboard companies tend to spend a larger proportion of their income from sales on R&D.
    Keywords: Research and Development intensity, EU-US R&D gap, size of firms
    JEL: O33
    Date: 2009–06
  5. By: Michael Peneder (WIFO)
    Abstract: This paper presents an integrated set of innovation taxonomies for firms and sectors. It discards the practice of representing industries by some average behaviour, instead characterising them by the distribution of diverse innovation modes at the firm level. The theoretical focus is on (i) Schumpeter's distinction between "creative" and "adaptive response", and (ii) differences regarding technological opportunities, appropriability conditions and the cumulativeness of knowledge. Applying statistical cluster analysis, the empirical identification is based on the micro-data of the Community Innovation Survey (CIS) for 22 European countries. The final cluster validation highlights the simultaneous diversity and contingency of firm behaviour with distinct technological regimes exhibiting systematic differences in the distribution of heterogeneous firms.
    Keywords: Technological regimes, innovation modes, sectoral taxonomy, industry classification, cluster analysis
    Date: 2010–02–24
  6. By: Bala Subrahmanya, M. H. (Indian Institute of Science); Mathirajan, M. (Anna University); Krishnaswamy, K. N. (Indian Institute of Science)
    Abstract: This paper probes the drivers, dimensions, achievements, and outcomes of technological innovations carried out by SMEs in the auto components, electronics, and machine tool sectors of Bangalore in India. Further, it ascertains the growth rates of innovative SMEs vis-a-vis noninnovative SMEs in terms of sales turnover, employment, and investment. Thereafter, it probes the relationship between innovation and growth of SMEs by (i) estimating a correlation between innovation sales and sales growth, (ii) calculating innovation sales for high, medium, and low growth innovative SMEs and doing a one-way ANOVA, and (iii) ascertaining the influence of innovation sales, along with investment growth and employment growth on gross value-added growth by means of multiple regression analysis. The paper brings out substantial evidence to argue that innovations of SMEs contributed to their growth.
    Keywords: technological innovations, sales growth, auto components, electronics, machine tools, Bangalore
    JEL: L25 L26
    Date: 2010
  7. By: Peter Voigt (JRC-IPTS); Pietro Moncada-Paternò-Castello (JRC-IPTS)
    Abstract: R&D and the entire innovation process are likely to be affected by the current crisis. Apart from changes in R&D spending, as any crisis usually provides also chances it may stimulate a new wave of networked / open innovation and in this regard lead to 'creative destruction' as Schumpeter called it. Thus, high-technology manufacturing is far better-positioned to face the crisis compared to low-tech manufacturing, which is assumed to fare especially badly. The figures of R&D expenditure are assumed to evolve accordingly. And small companies and particularly those which are financially restricted (many SMEs) are supposed to suffer most. In general, the downturn is supposed to accelerate the shift of EU manufacturing towards higher value-added, highly integrated, and internationally oriented sectors. Assumed that the latter tends to be characterised by higher R&D-intensity this in turn may have a positive impact on R&D investment figures. But, as structural changes usually happen slowly, this leverage effect may appear just in the long-run. Empirical evidence from a series of recent business surveys [mainly capturing R&D-performing / higher R&D-intensity sectors] suggests that the perception as well as the funding of corporate R&D and innovation activities are holding up fairly well so far which suggests an anti-cyclic firm behaviour in terms of R&D engagement in the light of the current economic and financial crisis. For 2008/09 the estimates of R&D expenditure changes differ significantly among the sources – mainly due to the corresponding assumption on the further evolvement of the current financial and economic crisis with the estimate of 4.1% for EU – based on the JRC-IPTS' IRMA-Survey – well in-between. However, across the sources, the corridor for the R&D investment change is assumed to be above the corresponding assumptions on GDP and sales growth. Evidence suggests that the impact of the crisis on R&D activities and the correspondingly assumed adjustments of firm strategies is sector specific. However, looking at micro level, there is no unique company strategy obvious commonly applied to face the crisis. In fact, some companies leave their R&D engagements unchanged, others cut them down, and a third group even accelerates their R&D and innovation activities (inclusive a significant leveraging of spending on R&D). In this regard experiences from past downturns suggest that companies having the farsightedness and the courage to invest more in R&D and innovation activities while others are cutting back have a significant advantage in the inevitable upswing that will come. Market rewards will follow – but not immediately.
    Keywords: corporate strategy, R&D and innovation, R&D spending, economic crisis
    JEL: O33
    Date: 2009–05
  8. By: Gantumur, Tseveen (DIW); Stephan, Andreas (JIBS)
    Abstract: To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than nonacquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers.
    Keywords: Technology Acquisition; Innovative Efficiency; Innovative Productivity; SFA; Difference-in- Difference Matching
    JEL: L24 L25 L60 O30
    Date: 2010–04–10
  9. By: Hagedoorn, John (UNU-MERIT, and Maastricht University); Wang, Ning (Maastricht University)
    Abstract: The mixed picture of extant research on the relationship between internal and external R&D prompts us to ask such a question: under what conditions is there complementarity or substitutability between different R&D strategies? The goal of this paper is to contribute to the empirical literature by advancing and testing the contingency of the relationship between internal and external R&D strategies in shaping firms‘ innovative output. Using a panel sample of incumbent pharmaceutical firms covering the period 1986-2000, our empirical analysis suggests that the level of in-house R&D investments, which is characterized by decreasing marginal returns, is a contingency variable that critically influences the nature of the link between internal and external R&D strategies. In particular, internal R&D and external R&D, through either R&D alliances or R&D acquisitions, turn out to be complementary innovation activities at higher levels of in-house R&D investments, whereas at lower levels of in-house R&D efforts internal and external R&D are substitutive strategic options. These findings are robust to alternative specifications and estimation techniques, including a dynamic perspective on firm innovative performance.
    Keywords: Complementarity, Substitutability, Internal R&D, External R&D, Innovative Output, Pharmaceutical Industry, Biotechnology
    JEL: O32 L24
    Date: 2010
  10. By: Carliss Y. Baldwin (Harvard Business School, Finance Unit)
    Abstract: This paper describes how entrepreneurial firms can use superior architectural knowledge of a technical system to gain strategic advantage. The strategy involves, first, identifying "bottlenecks" in the existing system, and then creating a new architecture that isolates the bottlenecks in modules. An entrepreneurial firm with limited financial resources can then focus on supplying superior bottleneck components, and while outsourcing non-bottleneck components. I show that a firm pursuing this strategy will have a higher return on invested capital (ROIC) than competitors with a less modular design. Over time, the focal firm can drive the ROIC of competitors below their cost of capital, causing them to shrink and possibly exit the market. The strategy was used by Sun Microsystems in the 1980s and Dell Computer in the 1990s.
    Keywords: architecture, innovation, knowledge, modularity, dynamics, competition, industry evolution
    JEL: D23 L22 L23 M11 O31 O34 P13
    Date: 2010–02
  11. By: Christina Guenther
    Abstract: The question of whether and when to enter a newly emerging product market has been the focus of practitioners as well as researchers. This paper contributes to the literature by investigating the order of entry as well as pre-entry experiences with a population-based approach for the radically new product market of multifunctional machine tools for the case of Germany between 1949 and 2002. Estimation results show, that later entrants outperform pioneers. Moreover, it turns out that industry and technology specific capabilities do not increase survival chances. But when decomposing the known positive age effect on survival, we see that particularly dynamic capabilities, i.e. the competence to integrate additional business activities into the current product portfolio, significantly lower the risk of failure in the new product market.
    Keywords: Length 20 pages
    Date: 2009–12
  12. By: Michele Cincera (JRC-IPTS); Raquel Ortega-Argilés (JRC-IPTS); Pietro Moncada-Paternò-Castello (JRC-IPTS)
    Abstract: Based on an original data set with information of a representative portfolio of among the largest 304 R&D investing companies over the 2003-2006 period, the overall analysis, except in a few cases, gives some robust evidence of a positive relationship between top R&D-investing companies and their performance in the stock markets as measured by the evolution of their market capitalisations' values. In terms of sectors, companies in the pharmaceuticals and biotechnology and software & computer services sectors in the UK and the chemicals sector in Germany appear to outperform the respective sectoral stock market indexes in which they operate. On the other hand some other sectors, such as technology hardware and equipment one in France, show an underperforming behaviour. Empirical findings from the econometric analysis suggest a positive impact of the firm's R&D intensity on its market capitalisation performance. Besides some data limitations which call for further investigations, R&D investment can without uncertainty be acknowledged as representing an important strategic element for companies' economic and financial performance, but is not the only one. To name a few of them, framework conditions in the economy, marketing activities and the level of market power of companies are only other important factors that have an impact on companies' performances which are also reflected on their stock markets values.
    Keywords: top R&D firms, market capitalisation performance, R&D intensity, size of R&D investments
    JEL: G30 L60 O31
    Date: 2009–09
  13. By: Flavio Lenz-Cesar; Almas Heshmati (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: R&D cooperation has received great attention among industrialists, decision makers and researchers as it facilitates research collaboration, information sharing, reduced R&D cost, and affects R&D resource allocation, advancement and competitiveness of the national industry, employment and survival of firms. This paper introduces an econometric approach for identifying the factors that lead firms to cooperative innovation. The determinants of firms cooperation in innovation were defined according to empirical findings on a dataset from the internationally standardized Korean Innovation Survey 2005, captured in a multivariate probit regression model. The model identified the determinants on firms¡¯ likelihood to participate in cooperation with other organizations when conducting innovation activities. The aim of this model was to subsidize further research applying agent-based modeling to simulate innovation networks in the Korean manufacturing sector in order to test different policy strategies on fostering cooperation in innovation.
    Keywords: Collaborative R&D, multivariate probit models, Korean innovation survey
    JEL: C35 C71 D20 L20 O31
    Date: 2009–11
  14. By: Ana Pérez-Luño (Department of Business Administration, Universidad Pablo de Olavide); Ramón Valle-Cabrera (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: While there is robust empirical evidence that firm patenting is positively associated with various measures of overall performance and competitiveness, less is known about what determines the patenting choice. For this reason, this paper examines whether R&D expenditure and the type of knowledge used in the invention determine the decision to patent. With this aim, we use a sample of firms and the European Patent Office to analyse how the combination of R&D expenditure and knowledge codifiability, observability and simplicity influences the patent decision. Our results contribute to the literature and assist R&D managers by showing that both R&D and codified knowledge have a positive impact on the number of inventions patented by a firm, while observable knowledge has a negative impact on patents. Furthermore, we find that the effect of R&D expenditure on the propensity to patent inventions is negatively moderated by knowledge observability and simplicity.
    Keywords: : R&D, patents, knowledge, invent
    Date: 2010–03
  15. By: Seong-Sang Lee; Yeonbae Kim (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: With the premise that patent data are reliable indicators of innovativeness, the empirical analysis of R&D?patents relationship is useful for monitoring the efficiency of the innovation process. This paper extends the research on the relationship between R&D spending and patent counts by estimating the impact of efficiency parameters. A data set from 1255 firms with nonzero R&D expenditures in Korea was studied. Results show that the difference in firms¡¯ innovative performance is attributable to firm-specific characteristics, including propensity to patent and firm size, and differences in efficiency parameters. They also indicate that firms that conduct patent searches before starting R&D activities obtain an average of 13.9% more patents with an increase of one unit on the ¡®patent search¡¯ scale. Results also show the importance of the role of IP managers and revenue splitting policy for employee-inventors in the innovation process.
    Keywords: Incentive for employee-inventor, Innovation process, Innovative performance, IP manager, preliminary patent search, R&D-patents relationship
    Date: 2009–10
  16. By: Pietro Moncada-Paternò-Castello (JRC-IPTS); Constantin Ciupagea (Institute of World Economy and Romanian Centre for Economic Modelling); Keith Smith (Australian Innovation Research Centre, University of Tasmania); Alexander Tübke (JRC-IPTS); Mike Tubbs (Innovomantex Ltd and Ashcroft International Business School)
    Abstract: This paper examines whether there are differences in private R&D investment performance between the EU and the US and, if so, why. The study is based on data from the 2008 EU Industrial R&D Investment Scoreboard. The investigation assesses the effects of several very distinct factors that can determine the relative size of the overall R&D intensities of the two economies: these are the influence of sector composition (structural effect) vis-à-vis the intensity of R&D in each sector (intrinsic effect) and the company demographics. The paper finds that the lower overall corporate R&D intensity for the EU is the result of sector specialisation (structural effect) - the US has a stronger sectoral specialisation in the high R&D intensity (especially ICT-related) sectors than does the EU, and also has a much larger population of R&D investing firms within these sectors. Since aggregate R&D indicators are so closely dependent on industrial structures, many of the debates and claims about differences in comparative R&D performance are in effect about industrial structure rather than sector R&D performance. These have complex policy implications that are discussed in the closing section.
    Keywords: Research and Development intensity, EU-US R&D gap, size of firms
    JEL: O33
    Date: 2009–06
  17. By: Yijuan Chen
    Abstract: Focused on innovation frequency of durable complementary goods, this paper shows that interdependency of innovation decisions generically gives rise to coordination failure between the producers. More importantly, the coordination failure may arise in opposite directions: Not only may the producers delay introducing new products, they may also introduce new products faster than the social optimum. The possibility of hastened innovations is in contrast to the conclusion from the literature focused on the monopolistic setting. The results provide a caution for policy-makers, and on the other hand serve as benchmarks for future studies incorporating competition.
    JEL: O31
    Date: 2010–03
  18. By: Hansen, Thorsten
    Abstract: This paper studies the impact of innovation on the organizational structure. The theoretical framework predicts that a larger parental pool of knowledge raises the probability of oshoring. This holds in a national as well as an international context. However, when the producer loses territorial protection, the changeover from non-integration to integration is delayed. Employing data on German rms investing in Eastern Europe nds empirical evidence for the theoretical predictions. The results are robust to dierent measurements and an instrumental variable regression.
    Keywords: offshoring; innovation; firm structure
    JEL: D23 D51 F23 L14 L21 L22 L23
    Date: 2010–04
  19. By: Francesco Bogliacino (Universidad EAFIT); Mario Pianta (University of Urbino)
    Abstract: The diversity of technological activities that contribute to growth in labour productivity is examined in this paper for manufacturing and services industries in eight major EU countries. We test the relevance of the two major strategies of technological competitiveness (based on innovation in products and markets) or cost competitiveness (relying on innovation in processes and machinery) and their impact on economic performances. We propose models for the determinants of changes in labour productivity and we carry out empirical tests both for both the whole economy and for the four Revised Pavitt classes that group manufacturing and services industries with distinct patterns of innovation. Tests are carried out by pooling industries, countries and three time periods, using innovation survey data from CIS 2, 3 and 4, linked to economic variables.The results confirm the strong diversity of the mechanisms leading to productivity growth in Europe, with different roles of sector-specific technological activities developed in the pursuit of the strategies of technological competitiveness and cost competitiveness. In all empirical tests, for all industries as well as for each revised Pavitt class, we find a presence of both strategies, with a relevance and impact that is specific for each subgroup of industries. Economic performances in European industries appear as the results of different innovation models, with strong specificities of the four Revised Pavitt classes (i.e. "Science Based industries", "Scale and Information Intensive industries", "Specialised Suppliers industries" and "Suppliers Dominated industries").A number of policy lessons emerge from our findings. Policies aiming at greater labor productivity growth may have to take into account the different mechanisms resulting from technological and cost competitiveness strategies, and the different relevance that they have in industry groups. Efforts to introduce new processes have emerged as a strong aspect of innovative activities in all industries, but their impact on productivity growth is likely to be inferior to that of a search for new products and markets, typical of "Science Based" and "Specialised Suppliers" industries alone. Policies may be more effective when they focus on the latter type of efforts. As the dynamics of demand plays a strong role in the potential for productivity growth, innovation policies should also develop a stronger integration with industrial and macroeconomic policies.
    Keywords: Innovation, Labour Productivity, Industry Taxonomies, Technological and Cost Competitiveness
    JEL: O31 O33 O41
    Date: 2009–09
  20. By: Raquel Ortega-Argilés (JRC-IPTS); Peter Voigt (JRC-IPTS)
    Abstract: This report discusses business R&D in SMEs in the light of a systematic review of publicly available information on industrial R&D, its common trends and related emerging issues. A number of factors towards better understanding of SME trajectories, specifics in terms of their R&D activities, and the attendant main challenges of SMEs are thus examined along their main boundaries. Company size, the life cycle stage of individual firms, the lack of entrepreneurial spirit in the EU, the lack of access to finance in Europe compared to the US, limited capabilities of SMEs, internationalisation/globalisation effects, intellectual property rights, and the effect of administrative burdens are considered in particular. In general, achieving a suitable support mix for business R&D in SMEs and embedding it in local, regional, national and European research and innovation systems remains an open but crucial question on the way towards achieving the Lisbon objectives.
    Keywords: business R&D, SMEs
    JEL: O33
    Date: 2009–06
  21. By: Hall, Bronwyn H. (University of California at Berkeley, UNU-MERIT, and Maastricht University); Mairesse, Jacques (UNU-MERIT, Maastricht University, and CREST); Mohnen, Pierre (UNU-MERIT, Maastricht University, and CIRANO)
    Abstract: We review the econometric literature on measuring the returns to R&D. The theoretical frameworks that have been used are outlined, followed by an extensive discussion of measurement and econometric issues that arise when estimating the models. We then provide a series of tables summarizing the major results that have been obtained and conclude with a presentation of R&D spillover returns measurement. In general, the private returns to R&D are strongly positive and somewhat higher than those for ordinary capital, while the social returns are even higher, although variable and imprecisely measured in many cases.
    Keywords: returns to R&D, innovation, social returns, spillovers
    JEL: O30 C23 C81 D24
    Date: 2010

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