Estimating dynamic R&D demand: An analysis of costs and long-run benefits

Arbeitspapier

Using firm-level data from the German manufacturing sector, we estimate a dynamic, structural model of the firm's decision to invest in R&D and quantify the cost and longrun benefit of this investment. The model incorporates and quantifies linkages between the firm's R&D investment, product and process innovations, and future productivity and profits. The dynamic model provides a natural measure of the long-run payoff to R&D as the difference in expected firm value generated by the R&D investment. For the median productivity firm, investment in R&D raises firm value by 3.0 percent in a group of hightech industries but only 0.2 percent in low-tech industries. Simulations of the model show that cost subsidies for R&D can significantly affect R&D investment rates and productivity changes in the high-tech industries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 13-089

Classification and Topics

• Classification: Wirtschaft ; Industry Studies: Manufacturing: General ; Innovation and Invention: Processes and Incentives ; Management of Technological Innovation and R&D
• Subject: R&D demand ; Innovation ; Productivity ; Dynamic structural model

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Peters, Bettina ; Roberts, Mark J. ; Vuong, Van Anh ; Fryges, Helmut
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/88129
• URN: urn:nbn:de:bsz:180-madoc-352220
• Last update: 10.03.2025, 11:43 AM CET