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Estimating dynamic R&D choice: an analysis of costs and long-run benefits
Citation
Peters, B and Roberts, MJ and Vuong, VA and Fryges, H, Estimating dynamic R&D choice: an analysis of costs and long-run benefits, Rand Journal of Economics, 48, (2) pp. 409-437. ISSN 0741-6261 (2017) [Refereed Article]
Copyright Statement
Copyright 2017 The RAND Corporation
DOI: doi:10.1111/1756-2171.12181
Abstract
This article estimates a dynamic structural model of discrete Research and Development (R&D)investment and quantifies its cost and long-run benefit for German manufacturing firms. The model incorporates linkages between R&D choice, product and process innovations, and future productivity and profits. The long-run payoff to R&D is the proportional difference in expected firm value generated by the investment. It increases firm value by 6.7% for the median firm in high-tech industries but only 2.8% in low-tech industries. Simulations show that reductions in maintenance costs of innovation significantly raise investment rates and productivity, whereas reductions in startup costs have little effect.
Item Details
Item Type: | Refereed Article |
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Keywords: | productivity, innovation, industry |
Research Division: | Economics |
Research Group: | Applied economics |
Research Field: | Industry economics and industrial organisation |
Objective Division: | Economic Framework |
Objective Group: | Microeconomics |
Objective Field: | Microeconomics not elsewhere classified |
UTAS Author: | Fryges, H (Dr Helmut Fryges) |
ID Code: | 122281 |
Year Published: | 2017 |
Web of Science® Times Cited: | 20 |
Deposited By: | TSBE |
Deposited On: | 2017-11-08 |
Last Modified: | 2018-05-24 |
Downloads: | 0 |
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