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The medium-term effect of R&D on firm growth

Abstract : This study analyses the effect of R&D expenditure on firm employment growth in the medium term, using six cross-sectional waves of an innovation survey conducted in the Netherlands in all sectors. The analysis is focused on firms having positive R&D expenditure and investigates whether higher investments in R&D (in proportion to firm turnover) translate into higher medium-term growth rates. Comparisons with growth on a shorter term are conducted by following the firm size evolution since the R&D investment for five consecutive years and allowing for firm exit. At all time terms, quantile regression techniques indicate that a higher R&D has a positive effect on high growers and allows a higher number of firms to be high growers. Still, once a firm invests in R&D, even if a higher investment makes the firm more likely to have a very good performance, it does not make it less likely to have a bad one.
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https://hal-sciencespo.archives-ouvertes.fr/hal-03604414
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Submitted on : Thursday, March 10, 2022 - 2:13:09 PM
Last modification on : Friday, August 5, 2022 - 2:49:41 PM

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Marco Capasso, Tania Treibich, Bart Verspagen. The medium-term effect of R&D on firm growth. Small Business Economics, 2015, 45 (1), pp.39 - 62. ⟨hal-03604414⟩

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