The Impact of Firm’s R&D Strategy on Profit and Productivity
2008 (English)Report (Other academic)
This paper investigates how a firm’s R&D strategy influences the firm performance as measured byproductivity and profitability. A formal production model is introduced to define and interpretalternative ways of measuring the impact of R&D. Studying 1,767 randomly selected firms from theSwedish manufacturing sector, the main findings are: (i) firms which apply persistent R&D performbetter than firms with occasional as well as no R&D, (ii) occasional R&D is associated with lowerperformance than no R&D, and (iii) in quantile regressions the positive effect from R&D persistencyis lacking for low productivity firms (lowest quartile) indicating a non-linear response. Moreover, theanalysis recognises the different roles of ordinary and knowledge labour in production whenspecifying alternative performance measures and when identifying knowledge labour as a firm’s R&Dcapacity, which has a highly significant impact on firm performance. Introducing a formal productionmodel in order to define and interpret alternative ways of measuring the impact of R&D, we applysimple ordinary OLS and quantile regressions on the economic model for analyzing the importance fora particular R&D strategy on firms’ productivity and profitability. To the best of our knowledge, webelieve that the main findings of the analysis make contributions to the R&D literature.
Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2008. , 28 p.
CESIS Working Paper Series in Economics and Institutions of Innovation, 156
R&D strategy, profit, productivity
IdentifiersURN: urn:nbn:se:kth:diva-72263OAI: oai:DiVA.org:kth-72263DiVA: diva2:487391
QC 201202092012-02-092012-01-312012-02-09Bibliographically approved