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The Determinants of R&D Investment: A Survey of the Empirical Research

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  • Bettina Becker

    (School of Business and Economics, Loughborough University, UK)

Abstract

This paper offers an extensive survey and a critical discussion of the empirical literature on the driving factors of R&D. These factors are subsumed under five broad types. The paper first summarises the key predictions from theory regarding each type's R&D effect. It then examines for which factors differences in the theoretical predictions can also be found in empirical studies, and for which factors the empirical evidence is more unanimous. As the focus is on the empirical literature, methodological issues are also highlighted. The major factor types identified in the literature are, individual firm or industry characteristics, particularly internal finance and sales; competition in product markets; R&D tax credits and subsidies; location and resource related factors, such as spillovers from university research within close geographic proximity, membership of a research joint venture and cooperation with research centres, and the human capital embodied in knowledge workers; and spillovers from foreign R&D. Although on balance there is a consensus regarding the R&D effects of most factors, there is also variation in results. Recent work suggests that accounting for nonlinearities is one area of research that may explain and encompass contradictory findings.

Suggested Citation

  • Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
  • Handle: RePEc:lbo:lbowps:2013_09
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    Cited by:

    1. Angelo Bonomi, 2017. "A mathematical toy model of R&D process. How this model may be useful in studying territorial development," IRCrES Working Paper 201706, Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    2. Diego d’Andria & Dimitrios Pontikakis & Agnieszka Skonieczna, 2018. "Towards a European R&D incentive? An assessment of R&D provisions under a common corporate tax base," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(5-6), pages 531-550, August.
    3. Tony Irawan & Paul J.J. Welfens, 2016. "ICT Dynamics and Regional Trade Bias in Asia: Theory and Empirical Aspects," EIIW Discussion paper disbei224, Universitätsbibliothek Wuppertal, University Library.
    4. Arthur Korus, 2016. "Currency Overvaluation and R&D Spending," EIIW Discussion paper disbei218, Universitätsbibliothek Wuppertal, University Library.
    5. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    6. Angelo Bonomi, 2017. "A technological model of the R&D process and its implications with scientific research and socio-economic activities," IRCrES Working Paper 201702, Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    7. Ivano D'Antonio, 2015. "Cooperazione e spesa in R&S: evidenze empiriche dalla Community Innovation Survey," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2015(116), pages 90-110.

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    Keywords

    R&D; R&D policy; innovation policy; financial constraints; competition; public funding; knowledge spillovers.;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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