Chapter

R&D Strategy and Firm Performance: What Is the Long-Run Impact of Persistent R&D?

Hans Lööf, Börje Johansson, Martin Andersson and Charlie Karlsson

in Innovation and Growth

Published in print September 2012 | ISBN: 9780199646685
Published online January 2013 | e-ISBN: 9780191748998 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199646685.003.0009
R&D Strategy and Firm Performance: What Is the Long-Run Impact of Persistent R&D?

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There are systematic long-run differences in the performance of firms. This chapter argues that such persistent performance gaps can be explained by the fact that firms employ different R&D-strategies. Controlling for unobservable heterogeneity, past performance and other firm characteristics, that labour productivity is shown to be, on average, 13 percent higher among firms with persistent R&D commitment and 4 percent higher among firms which make occasional R&D efforts when compared with firms which do not invest in R&D. Furthermore, firms which employ a strategy with persistent R&D efforts are rewarded with a productivity growth rate that, on average, is about 2 percent higher than for other firms. The results are similar when firm performance is measured as total sales or exports per labour input.

Keywords: R&D; strategy; innovation; productivity; productivity growth; export; dynamic panel data

Chapter.  9822 words.  Illustrated.

Subjects: Financial Markets

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