Publications
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PDF The determinants of R&D Investment: the role of Cash flow and Capabilities
In this paper we estimate a behavioural equation for R&D investment. We assess the impact of liquidity constraints and capabilities,… Show more measured respectively as internal cash flow and distance from the technological frontier. We perform our estimation on an industry level panel covering fifteen European countries from 1996 to 2005 and on a sample of European R&D performers extracted from COMPUSTAT covering 2000-2008. Both at industry level and firm level we found that financing constraints exist and that distance from the frontier negatively affects the decision to engage in R&D. The main policy implications are the following: (a) R&D is a cash constraint investment, thus the amount which is performed on the market is suboptimal and specific policies should try to overcome these financing constraints, (b) the lack of R&D is also generated by lack of capabilities, so the economy needs specific inetrventions tailored on the generation of enablers, such as human capital accumulation. Show less
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PDF Corporate R&D and firm efficiency: Evidence from Europe's top R&D investors
The main objective of this study is to investigate the impact of corporate R&D activities on firm performance, measured by… Show more labour productivity. To this end, the stochastic frontier technique is used on a unique unbalanced longitudinal dataset on top European R&D investors over the period 2000–2005. The study quantifies technical inefficiency of individual firms. From a policy perspective, the results of this study suggest that – if the aim is to leverage firms' productivity – emphasis should be put on supporting corporate R&D in high-tech sectors and, to some ex-tent, in medium-tech sectors. On the other hand, corporate R&D in the low-tech sector is found to have a minor effect in explaining productivity. Instead, encouraging investment in fixed assets appears important for the productivity of low-tech industries. Hence, the allocation of support for corporate R&D seems to be as important as its overall increase and an 'erga omnes' approach across all sectors appears inappropriate. However, with regard to technical efficiency, R&D intensity is found to be a pivotal factor in explaining firm efficiency. This is true for all industries. Show less
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PDF Doing R&D or not (in a crisis), that is the question...
This study investigates how corporate R&D evolves in the light of the contemporary economic crisis, using empirical evidence from past… Show more downturns, looking at the relevant literature and performing an empirical analysis of recent business survey data (collected during 2009). Findings show that some companies have reduced their innovation activities significantly, while others maintained them and a third group even increased their activities to reap the benefits in the expected upswing afterwards. Overall, we observe a deceleration of R&D and innovation activities in the light of the crisis, but the trend figures remain positive. Driven by the companies that reinforce their R&D and innovation efforts to thrive through the downturn and thus seek to gather the benefits in the upswing to come, the R&D and innovation landscape is likely to look different in the aftermath of the crisis. These changes will inevitably affect policy intervention in the field of innovation and are a unique chance for the reorientation of policy measures. More profoundly, they could be at the root of a new paradigm, departing from a transition from an industrial to a knowledge-based society. Show less
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PDF The 2010 Survey on R&D Investment Business Trends
This report presents the findings of the sixth survey on trends in business R&D investment. These are based on 205… Show more responses of mainly larger companies from the 1000 EU-based companies in the 2010 EU Industrial R&D Investment Scoreboard. These 205 companies are responsible for R&D investment worth almost €40 billion, constituting around 30% of the total R&D investment of the 1000 EU Scoreboard companies. The main findings are as follows: Companies' R&D investment is expected to grow by 5%, more than double the expectations of last year's survey. The expectations have however not yet reached the levels prior to the crisis (7% in the 2007 survey). The EU-based companies in the sample carry out one-quarter of their R&D outside the EU. The shares of R&D investment carried out in China and India are around 5%, which is a similar value to previous surveys and a relatively low share in the light of globalisation. Their expectations for R&D investment growth within the EU have increased to 3%, leading to a considerable nominal increase of R&D in the EU in the coming years. However, growth rate expectations are much higher in China (25%), Japan (17%), the rest of the world (20%), India (8%), other European countries (8%) and the US and Canada (5%). This reflects the increasing participation of European companies in the global economy, in particular emerging economies, while maintaining their R&D focus in the EU. Most companies chose their home country as the most attractive location for R&D, and identified the US, China, Germany and India as the most attractive locations outside their home country. R&D is the most important component of innovation for companies which invest most in R&D. In low R&D intensity sectors, greater increases in innovation investments are expected. The responding companies report that an average 27% of annual sales came from innovative products and services introduced in the past three years. Availability of qualified personnel and public support had a clearly positive effect on the company's innovation activities. Different aspects related to Intellectual Property Rights (IPRs), namely the conditions for putting them into force, the costs, and the time to obtain protection, are perceived as negative for all sectors. Recruitment of qualified employees, collaboration with universities and companies and participation in conferences were important for company innovation. The patterns and trends of knowledge sharing activities are similar to those observed for R&D investment, i.e. a focus within the EU, but with stronger growth expected outside. Show less
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PDF The 2010 EU Industrial R&D Investment Scoreboard
The 2010 "EU Industrial R&D Investment Scoreboard", released in October 2010, presents information on the top 1000 EU companies and… Show more 1000 non-EU companies investing in R&D in 2009. The Scoreboard includes data on R&D investment along with other economic and financial data from the last four financial years. Show less
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PDF Does Europe perform too little corporate R&D?
This paper examines the differences in private R&D investment performance between the EU and the US. It assesses the distributions… Show more of R&D intensity, the effects of the sector composition vis-à-vis the intensity of R&D in each sector, and the differences in demographics of large R&D investing companies. Show less
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