IDEAS home Printed from https://ideas.repec.org/p/ucm/doicae/1407.html
   My bibliography  Save this paper

Does R&D increase the profit contribution of intangible assets? An exploration of European and American automotive supplierss

Author

Listed:
  • Stefan Lutz

    (Royal Docks Business School, University of East London)

Abstract

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 intangible assets in the form of intellectual property (IP) and these assets command a return that increases overall profits of the firm. This hypothesis is investigated for the North American and European automotive supplier industries. Results indicate that R&D expenses in fact increase both intangible asset levels and their profit contributions. 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. Classification-JEL: D24, L20, L62, M21 Keywords: Productivity; Intellectual property; Royalties; MNE; Transfer pricing. Note: The views expressed in this paper are those of the author and do not necessarily reflect those of the institutions he is affiliated with. The author would like to thank seminar participants at the University of East London for helpful comments and suggestions and Keshav Goel for diligent research assistance. Length: 54 pages

Suggested Citation

  • Stefan Lutz, 2014. "Does R&D increase the profit contribution of intangible assets? An exploration of European and American automotive supplierss," Documentos de Trabajo del ICAE 2014-07, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
  • Handle: RePEc:ucm:doicae:1407
    as

    Download full text from publisher

    File URL: https://eprints.ucm.es/id/eprint/24965/1/1407.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    productivity; intellectual property; royalties; mne; transfer pricing. note: the views expressed in this paper are those of the author and do not necessarily reflect those of the institutions he is affiliated with. the author would like to thank seminar participants at the university of east london for helpful comments and suggestions and keshav goel for diligent research assistance. length: 54 pages;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucm:doicae:1407. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/feucmes.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Águeda González Abad (email available below). General contact details of provider: https://edirc.repec.org/data/feucmes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.