Related diversification and R&D intensity dynamics
AbstractUsing longitudinal data of Spanish manufacturing companies, we study the dynamic, bidirectional relationship between firm research and development (R&D) intensity and corporate diversification in an organic growth setting. Our empirical approach accounts for the different sources of endogeneity. Although we find a positive linear effect of R&D intensity on related diversification, the effect of related diversification on R&D intensity assumes the form of an inverted U. Thus, the effect of related diversification on R&D intensity is positive, but marginally decreases for moderate levels of related diversification. Such an effect can become negative, however, for high levels of related diversification. Additionally, as a consequence of dynamics, the effects after one year are substantially lower than the overall effects that occur over several years.
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Bibliographic InfoPaper provided by Universidad Carlos III de Madrid in its series Open Access publications from Universidad Carlos III de Madrid with number info:hdl:10016/15671.
Length: 550 p.
Date of creation: Apr 2010
Date of revision:
Publication status: Published in Research Policy (2010-04) v.v. 39, p.537-548
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Web page: http://www.uc3m.es
Diversification; R&D intensity; Dynamics; Organic growth; Endogeneity; Panel data;
Other versions of this item:
- Alonso-Borrego, César & Forcadell, Francisco Javier, 2010. "Related diversification and R&D intensity dynamics," Research Policy, Elsevier, vol. 39(4), pages 537-548, May.
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