The medium-term effect of R&D on firm growth
Marco Capasso, Tania Treibich & Bart Verspagen
#2014-001
This study analyses the medium-term effect of R&D expenditure on firm
employment growth. Four cross-sectional waves of an innovation survey
conducted in the Netherlands have been used to evaluate the effect on
firm growth in the five years following the investment. Panel data fixed
effect techniques, also allowing for selection bias corrections,
indicate a positive influence of R&D on growth. Limited dependent
variable models have been used throughout the whole analysis to consider
explicitly the cases of firms exiting the market in the analysed medium
term.
Keywords: firm growth; R&D expenditure; industrial dynamics; panel Tobit
models
JEL classification: L20, L10, O32