Empirical modeling of R&D demand in a dynamic framework

Mark J. Roberts, Van Anh Vuong

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

Empirical analysis of firm-level investment in research and development (R&D) and its effect on innovation patterns and productivity has advanced as a result of innovation surveys in many countries. The weak link in the analysis of these surveys is the empirical model of firm R&D choice. In this paper we summarize how a dynamic, structural model of firm investment can be used to estimate firm demand for R&D with the data collected in innovation surveys. The estimates provide a natural measure of the expected benefit to the firm of investing in R&D. They also allow the researcher to simulate how the firm's R&D investment will respond to factors that shift cost or demand such as a policy change designed to subsidize R&D expenditures or provide financial support to firms with less favorable access to capital markets.

Original languageEnglish (US)
Pages (from-to)185-205
Number of pages21
JournalApplied Economic Perspectives and Policy
Volume35
Issue number2
DOIs
StatePublished - Jun 1 2013

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics

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