R&D, IP, and firm profits in the automotive supplier industry
Economic theory implies that research and development (R&D) efforts increase firm productivity and ultimately profits. In particular, R&D expenses lead to the development of intellectual property (IP) and IP commands a return that increases overall profits of the firm. This hypothesis is investigated for the North American automotive supplier industry by analyzing a panel of 5000 firms for the years 1950 to 2011. Results indicate that R&D expenses in fact increase profitability at the firm level. In particular, increases in the R&D expense to sales ratio lead to increases in the profit contribution of intangible assets relative to sales. This indicates that more R&D intensive IP should command higher royalty rates per sales when licensed to third parties and within multinational enterprises alike.
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- Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010.
"Measuring the Returns to R&D,"
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- Bronwyn H. Hall & Jacques Mairesse & Pierre Mohnen, 2009. "Measuring the Returns to R&D," NBER Working Papers 15622, National Bureau of Economic Research, Inc.
- Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," MERIT Working Papers 006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Bronwyn H. Hall & Jacques Mairesse & Pierre Mohnen, 2010. "Measuring the Returns to R&D," CIRANO Working Papers 2010s-02, CIRANO.
- Bronwyn H. Hall, 2010. "Measuring the Returns to R&D: The Depreciation Problem," NBER Chapters,in: Contributions in Memory of Zvi Griliches, pages 341-381 National Bureau of Economic Research, Inc.
- Bronwyn H. Hall, 2005. "Measuring the Returns to R&D: the Depreciation Problem," Annals of Economics and Statistics, GENES, issue 79-80, pages 341-381.
- Bronwyn H. Hall, 2007. "Measuring the Returns to R&D: The Depreciation Problem," NBER Working Papers 13473, National Bureau of Economic Research, Inc.
- Lutz, Stefan, 2013. "Risk premia in multi-national enterprises," The North American Journal of Economics and Finance, Elsevier, vol. 25(C), pages 293-305.
- Stefan Lutz, 2012. "Risk premia in multi-national enterprises," ICER Working Papers 08-2012, ICER - International Centre for Economic Research.
- Stefan Lutz, 2012. "Risk premia in multi-national enterprises," The School of Economics Discussion Paper Series 1216, Economics, The University of Manchester.
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