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Keynes-Plus? Effective Demand and Changes in Firm-Level R&D: An Empirical Note

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  • Brouwer, Erik
  • Kleinknecht, Alfred

Abstract

Analyzing changes over time in firm-level R&D efforts, the authors find that demand growth in a firm's sector of principal activity has a positive influence on changes in a firm's R&D effort, confirming J. Schmookler's (1966) 'demand-pull' hypothesis. This finding points to an aspect of effective demand which has never been directly noticed by Keynes or the Keynesians. Such findings are important because of evidence in the literature that a firm's innovation activities are positively related to employment growth, export intensity, and profits. Copyright 1999 by Oxford University Press.

Suggested Citation

  • Brouwer, Erik & Kleinknecht, Alfred, 1999. "Keynes-Plus? Effective Demand and Changes in Firm-Level R&D: An Empirical Note," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(3), pages 385-391, May.
    • Handle: RePEc:oup:cambje:v:23:y:1999:i:3:p:385-91
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    References listed on IDEAS

    as
    1. Walsh, Vivien, 1984. "Invention and innovation in the chemical industry: Demand-pull or discovery-push?," Research Policy, Elsevier, vol. 13(4), pages 211-234, August.
    2. Branstetter, Lee & Crepon, Bruno & Hall, Bronwyn H. & Mairesse, Jacques, 1995. "The Time Series Relationship Between Investment and Cash Flow in the Scientific Sector: A Panel Data Study Comparing French, Japanese, and the United States Firms," Department of Economics, Working Paper Series qt9tr0867s, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    3. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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