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A Reprise of Size and R&D

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  • Cohen, Wesley M
  • Klepper, Steven

Abstract

Numerous studies have shown that, within industries, the propensity to perform R&D and the amount of R&D conducted by performers are closely related to the size of the firm, while R&D productivity declines with firm size. These findings have been widely interpreted to indicate that there is no advantage to large firm size in conducting R&D. The authors show how a simple model based on the idea of R&D cost spreading can explain the prior findings about the R&D-firm size relationship, as well as additional features of the R&D-firm size relationship, implying an advantage to large size in R&D. Copyright 1996 by Royal Economic Society.

Suggested Citation

  • Cohen, Wesley M & Klepper, Steven, 1996. "A Reprise of Size and R&D," Economic Journal, Royal Economic Society, vol. 106(437), pages 925-951, July.
  • Handle: RePEc:ecj:econjl:v:106:y:1996:i:437:p:925-51
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