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R&D Dynamics And Firm Growth: The Importance Of R&D Persistency In The Economic Crisis

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  • HAYOUNG PARK

    (Technology Management, Economics and Policy Program (TEMEP), Seoul National University, Seoul, Republic of Korea)

  • TAEWON KANG

    (Technology Management, Economics and Policy Program (TEMEP), Seoul National University, Seoul, Republic of Korea2Institute of Engineering Research, Seoul National University, Seoul, Republic of Korea)

  • JEONG-DONG LEE

    (Technology Management, Economics and Policy Program (TEMEP), Seoul National University, Seoul, Republic of Korea)

Abstract

There has been a lot of interest in R&D dynamics, including the persistency and volatility of R&D investment. However, there is a lack of empirical evidence supporting the impact of R&D dynamics on firm growth in the context of an economic crisis. This study examines the effects of R&D dynamics on firm growth during and after the global financial crisis of 2008–2009. Based on firm-level data, we construct a balanced panel for 1,137 firms in the global petrochemical industry. Our findings indicate that firms with R&D persistency show higher growth during and after the crisis, regardless of firm size. R&D persistency has a higher impact on firm growth in large firms than in smaller ones. In addition, R&D persistency has greater influence than the level of R&D investment. Firms should pursue non-cyclical and consistent R&D strategies with a long-term perspective, especially in high uncertainty conditions.

Suggested Citation

  • Hayoung Park & Taewon Kang & Jeong-Dong Lee, 2019. "R&D Dynamics And Firm Growth: The Importance Of R&D Persistency In The Economic Crisis," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(05), pages 1-24, June.
    • Handle: RePEc:wsi:ijimxx:v:23:y:2019:i:05:n:s136391961950049x
    DOI: 10.1142/S136391961950049X
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