IS CORPORATE R&D INVESTMENT IN HIGH‐TECH SECTORS MORE EFFECTIVE?

Abstract

"This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data and on a unique micro-longitudinal database consisting of 532 top European R&D investors. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labor productivity; this general result is largely consistent with previous literature in terms of the sign, the significance, and the magnitude of the estimated coefficients. More interestingly, both at sectoral and firm levels the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium- and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and is the main determinant of productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support overall capital formation." Copyright (c) 2009 Western Economic Association International.

R&D and Non-Linear Productivity Growth of Heterogeneous Firms

“…These results imply that high-tech sectors' firms not only invest more in R&D, but also achieve more in terms of productivity gains connected with research activities. These results are in line with previous studies, which usually find that R&D investment makes larger impact on firm productivity in high-tech sectors than in low-tech sectors (Griliches and Mairesse, 1983;Cuneo and Mairesse, 1984;Verspagen, 1995;Harhoff, 1998;Kwon and Inui, 2003;Tsai and Wang, 2004;Ortega-Argiles et al, 2010;Kumbhakar et al, 2010).…”

Corporate R&D and firm efficiency: evidence from Europe’s top R&D investors

“…For capital input, the results are the opposite: they appear most vital for low-tech sectors, tend to be less relevant for medium-tech and are insignificant for high-tech sectors (see Ortega-Argilés et al, 2010).…”

The effects of R&D intensity and internationalization on the performance of non-high-tech SMEs

“…They can increase firm capacity to absorb knowledge created from the relationships forged with external organizations and the capacity to use that knowledge to increase firm performance (Cohen and Levinthal, 1990). However, these investments are shown to be more effective in achieving productivity gains in high-tech sectors than in non-high-tech sectors (Ortega-Argilés et al, 2010). The over-concentration of SME research on technology-intensive and new technology-based sectors is seen as justified given the employment potential (Colombo and Grilli, 2007;Hoffman et al, 1998;Santarelli and Vivarelli, 2007), as well as the greater capacity for internal organization, strategic flexibility and the establishment of strategic cooperation networks with shared resources that high-tech SMEs possess in comparison to non-high-tech SMEs (Eisingerich et al, 2009;Kindström and Kowalkowski, 2009;Nunes et al, 2012).…”