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Effects Of Firm-Specific Factors On R&D Expenditures Of Agribusiness Companies

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  • Roucan-Kane, Maud
  • Ubilava, David
  • Xu, Pei

Abstract

The objective of this paper is to determine how the firm's infrastructure, the financial characteristics of a company (net income, sales), and the organizational structure (number of acquisitions, age of establishment of the firm) affect R&D investments in the agricultural sector. We use data for companies under the SIC codes for agricultural chemicals, and crop planning and protection. The results based on analysis of 69 observations of 12 firms revealed that firm's financial and organizational infrastructure does affect its R&D expenditures. Older and larger firms tend to spend more on R&D. During the last 17 years the R&D expenditures with respect to the sales of the company have been reduced. Finally, contrary to the expectations, previous year's profit margins are negatively correlated with the R&D over the sales ratio of the following year.

Suggested Citation

  • Roucan-Kane, Maud & Ubilava, David & Xu, Pei, 2007. "Effects Of Firm-Specific Factors On R&D Expenditures Of Agribusiness Companies," Working papers 7332, Purdue University, Department of Agricultural Economics.
    • Handle: RePEc:ags:puaewp:7332
    DOI: 10.22004/ag.econ.7332
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    File URL: https://ageconsearch.umn.edu/record/7332/files/wp070004.pdf
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    References listed on IDEAS

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    1. Hughes, Kirsty, 1988. "Concentration and Diversification of R&D in a Conglomerate World," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 50(3), pages 243-261, August.
    2. Levin, Richard C & Cohen, Wesley M & Mowery, David C, 1985. "R&D Appropriability, Opportunity, and Market Structure: New Evidence on Some Schumpeterian Hypotheses," American Economic Review, American Economic Association, vol. 75(2), pages 20-24, May.
    3. Wahlroos, B & Backstrom, M, 1982. "R & D Intensity with Endogenous Concentration: Evidence for Finland," Empirical Economics, Springer, vol. 7(1-2), pages 13-22.
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    Cited by:

    1. Namchul Shin & Kenneth L. Kraemer & Jason Dedrick, 2014. "Value capture in global production networks: evidence from the Taiwanese electronics industry," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(1), pages 74-88, January.

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