R&D Behavior of German Manufacturing Companies during the 2008/09 Recession
AbstractThis paper investigates to what extent the R&D behavior of manufacturing companies was influenced by the 2008/09 crisis. Based on a broad official data set for German manufacturing companies, only a few companies that engaged in R&D during 2008 gave it up in the following year. Some companies even started R&D during crisis. R&D expenditures declined in 2009 compared to 2008, but expanded in 2010. The development of R&D expenditures was less volatile than sales. Probit analyses show that the occurrence of R&D in 2009 is very much determined by engagement in R&D in 2008 and that changes in demand are not relevant. However, fluctuation in demand proved to be relevant in the regressions computed where the intensity of R&D expenditures was the dependent variable. This result suggests that companies reacted counter cyclically in 2008/09, i.e. the reduction in R&D was smaller than the decline in demand, or the expansion of R&D expenditures was greater than the change in demand. Similar regressions for using R&D staff as the dependent variable did not find any influence of changes in demand. The results suggest that companies see R&D as a longer term task necessary to retain competitiveness.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1357.
Length: 29 p.
Date of creation: 2014
Date of revision:
Research and development; Business cycle; Manufacturing;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-08 (All new papers)
- NEP-CSE-2014-02-08 (Economics of Strategic Management)
- NEP-INO-2014-02-08 (Innovation)
- NEP-MAC-2014-02-08 (Macroeconomics)
- NEP-TID-2014-02-08 (Technology & Industrial Dynamics)
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