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EU-US differences in the size of R&D intensive firms: Do they explain the overall R&D intensity gap?

Author

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  • Raquel Ortega-Argiles

    () (Joint Research Centre-European Commission, IPTS Seville)

  • Andries Brandsma

    (Joint Research Centre-European Commission, IPTS Seville)

Abstract

The average firm size of the top R&D investors among US-based companies is smaller than that of the EU-based firms. Does this help to explain why the US has a greater R&D intensity, or is the higher firm size in the EU, just as its lower R&D intensity, determined by the sectors in which the top R&D investors are operating? Using data on the top-R&D investors from the 2006 EU Industrial R&D Investment Scoreboard, the size differential between R&D performers in the EU and US is more closely examined. A first observation is that, despite great differences between sectors, the overall distribution of companies' R&D investments in both economies is remarkably similar, as opposed to the distribution of the R&D/sales ratios of the same two sets of companies. The notion that size plays a role, independent of the sectoral composition of R&D, is then confirmed by regression analysis. In the US as well as in the EU, smaller sized Scoreboard companies tend to spend a larger proportion of their income from sales on R&D.

Suggested Citation

  • Raquel Ortega-Argiles & Andries Brandsma, 2008. "EU-US differences in the size of R&D intensive firms: Do they explain the overall R&D intensity gap?," Jena Economic Research Papers 2008-049, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2008-049
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    Cited by:

    1. Davide Castellani & Mariacristina Piva & Torben Schubert & Marco Vivarelli, 2016. "R&D and Productivity in the US and the EU: Sectoral Specificities and Differences in the Crisis," John H Dunning Centre for International Business Discussion Papers jhd-dp2016-03, Henley Business School, Reading University.

    More about this item

    Keywords

    R&D intensity; firm size; panel data;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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