Into thin air: using a quantile regression approach to explore the relationship between R&D and innovation
AbstractApplying quantile regression to 760 Finnish firms, we show that the relationship between R&D and firm performance is less straight forward than so far assumed. OLS regression analysis fails to capture the effect of R&D expenditure at different locations on the performance distribution. We reveal that R&D matters, especially on the medium quantiles, while regressing against the upper quantiles of the economic gains from innovation distribution exhibit decreasing returns scale in R&D. Our results confirm that Gaussian statistics fail to capture the most interesting part of the distribution - namely the extreme observations located in the tails.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Review of Applied Economics.
Volume (Year): 24 (2010)
Issue (Month): 1 ()
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- Eric Bartelsman & Sabien Dobbelaere & Bettina Peters, 2013. "Allocation of Human Capital and Innovation at the Frontier: Firm-level Evidence on Germany and the Netherlands," Tinbergen Institute Discussion Papers 13-095/VII, Tinbergen Institute.
- Westerberg, Hans Seerar, 2014. "The Return to R&D and Seller-buyer Interactions: A Quantile Regression Approach," Ratio Working Papers 231, The Ratio Institute.
- Coad, Alex & Segarra Blasco, Agustí, 1958- & Teruel, Mercedes, 2013. "Innovation and firm growth: Does firm age play a role?," Working Papers 2072/211886, Universitat Rovira i Virgili, Department of Economics.
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- Bartelsman, Eric & Dobbelaere, Sabien & Peters, Bettina, 2013. "Allocation of Human Capital and Innovation at the Frontier: Firm-Level Evidence on Germany and the Netherlands," IZA Discussion Papers 7540, Institute for the Study of Labor (IZA).
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