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The role of skills as a major driver of corporate R&D

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Author Info

  • Mariacristina Piva
  • Marco Vivarelli

Abstract

Purpose – The purpose of this paper is to investigate the determinants of R&D investment at the level of the firm. Design/methodology/approach – A balanced panel of 215 Italian manufacturing firms over the 1995-2000 period has been used to test the technology-push, the demand-pull and the endogenous skill-bias hypotheses. Econometrically, both the GMM-SYS estimator and the Least Squares Dummy Variable Corrected (LSDVC) estimator (a recently-proposed panel data technique particularly suitable for small samples) have been used. Findings – Results support the well-established technology-push and demand-pull hypotheses and, furthermore, supply evidence for the role of skill endowment in increasing a firm's R&D investments. Research limitations/implications – A limitation of the study concerns the measure of skills which is here, as in previous economic literature, simply the ratio between productive (blue-collar) and non-productive (white-collar) workers. Another limitation of this contribution concerns its limited generalisability: data come from relatively large Italian manufacturing firms, i.e. the service sector and SMEs are not considered. Practical implications – Consistently with the related managerial and economic literature, the basic result is that current skill endowment may significantly and positively influence a firm's current R&D decision; therefore, adequate education and training policies may indirectly induce an increase in corporate R&D investment. In terms of managerial implications, this means that HRM may be seen as an indirect strategy for improving a firm's R&D effort and ultimately for improving its performance through innovation. Originality/value – While there is a well-established literature investigating the so-called Skill Biased Technological Change, few microeconomic empirical studies have been devoted to test the reverse relationship. The paper aims to fill this gap, testing whether higher skills may induce higher R&D expenditures.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 30 (2009)
Issue (Month): 8 (November)
Pages: 835-852

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Handle: RePEc:eme:ijmpps:v:30:y:2009:i:8:p:835-852

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Related research

Keywords: Demand; Innovation; Research and development; Skills;

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Citations

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Cited by:
  1. Fabio Campanini & Serena Costa & Paolo Rizzi, 2013. "The Machine Tool Industry in Italy: Industrial Innovations and Performances," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1391, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  2. García-Quevedo, José & Pellegrino, Gabriele & Vivarelli, Marco, 2011. "R&D Drivers in Young Innovative Companies," IZA Discussion Papers 6136, Institute for the Study of Labor (IZA).
  3. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute for the Study of Labor (IZA).
  4. Ilina Srour & Erol Taymaz & Marco Vivarelli, 2014. "Globalization, Technology and Skills: Evidence from Turkish Longitudinal Microdata," ERC Working Papers 1405, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.
  5. Elena Huergo & Lourdes Moreno, 2011. "Does history matter for the relationship between R&D, innovation, and productivity?," Industrial and Corporate Change, Oxford University Press, vol. 20(5), pages 1335-1368, October.
  6. Gabriele Pellegrino & Mark J. Maria Savona, 2013. "Is money all? Financing versus knowledge and demand constraints to innovation," Working Papers 2013/21, Institut d'Economia de Barcelona (IEB).
  7. José García-Quevedo & Gabriele Pellegrino & Marco Vivarelli, 2011. "The determinants of YIc's R&D activity," Working Papers XREAP2011-20, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2011.
  8. H. T. Tran & E. Santarelli, 2013. "Revisiting Italian Emigration Before the Great War: A Test of the Standard Economic Model," Working Papers wp909, Dipartimento Scienze Economiche, Universita' di Bologna.
  9. Huergo, Elena & Moreno, Lourdes, 2014. "National or international public funding? Subsidies or loans? Evaluating the innovation impact of R&D support programmes," MPRA Paper 54218, University Library of Munich, Germany.

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