The Negative Impact of Uncertainty on R&amp;D Investment: International Evidence

Lin, Yu‐Chen; Dong, Daxin; Wang, Jiaxin

doi:10.3390/su13052746

Cited by 6 publications

(3 citation statements)

References 54 publications

(93 reference statements)

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“…However, R&D expenditure doesn't always produce similar effects on developments [15], as the study found negative relationship between R&D expenditure and SDG 8 among countries in South America, Australia, China, India, Oceania and the Middle East. Furthermore, [46] found negative effects between R&D expenditure and economic growth among several countries, globally. Zhu et al, [9] argue that when R&D expenditure is highly financed by government the effect on companies and firm's growth tends to be lower as they are guided by PLOS ONE governmental pressure.…”

Section: Plos Onementioning

confidence: 99%

Global outlook of the multiplier effect of research and development on environmental sustainability

Ansah-Mensah,

Osman,

Yalley

et al. 2023

PLoS ONE

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In a time of severe environmental problems and growing public and private expenditure to promote a sustainable society, studies on the impact of Research and Development (R&D) on environmental sustainability hardly ever exist. This study looked at how R&D promotes the attainment of environmentally sustainable goals, globally. Data at the country level was compiled from the United Nations-Sustainable Development Goals (UN-SDG) database and the World Bank, then processed and analysed using spatial techniques such as spatial merge, autofill, autocorrelation, and geographic weighted regression. Expenditure on R&D and publications in scientific journals had a positive impact on SDGs 8 and 11 for all nations. R&D expenditure on SDG 8 was higher for Southern African countries. The impact of scientific and technical journal articles was greater for Middle East countries. Also, scientific and technical journal articles had greater effects on attainment of SDG 11 in Africa. Exports of high technology from South America and Europe were important for achieving SDG 15. However, the effect of patent and trademark applications had minimal effect on achieving environmentally sustainable goals. The study recommends boosting R&D expenditure by governments and international organisations, particularly in Africa because the multiplier impact extends beyond economic development to environmental sustainability which is necessary for the continent to abate the challenges of climate change.

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Section: Plos Onementioning

confidence: 99%

Global outlook of the multiplier effect of research and development on environmental sustainability

Ansah-Mensah,

Osman,

Yalley

et al. 2023

PLoS ONE

View full text Add to dashboard Cite

show abstract

“…19 Against that evidence, firm-level uncertainty may raise R&D investment because firms want to utilize R&D investment as a strategy to reach a competitive position. 20 Despite the conflicting views, the general consensus is that the direction of the impact depends mostly on a firm's learning curve in adjusting to changing market conditions. 10,21 Another relevant branch of literature focuses on strategic interaction between firms to explain the investment decisions under uncertainty using the real option model in the framework of a game approach.…”

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Creating portfolios of firm-specific energy R&D investment under market uncertainty

Lee

Park

Kim

et al. 2022

Energy & Environment

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This research determines the optimal distribution of firm-specific energy research and development (R&D) investment that balances firms’ return and risk under market-induced uncertainty. We focus on creating optimal portfolios of target firms and their optimal energy R&D investments that maximize their return on investments (ROIs) for given levels of risk. We employ a stochastic optimization framework that maximizes firms’ ROIs for energy R&D investment, measured by the ratio of the number of patents issued for energy technologies to the amount of annual energy R&D expenditures, for 78 energy firms in South Korea between 2006 and 2017. The findings from our mean-standard deviation tradeoff frontiers are summarized as follows: 1) the tradeoff ratio increases as the weights shift from 100% on maximizing expected ROI toward 100% on minimizing its standard deviation regardless of market conditions and 2) the tradeoff ratio during the downturn is higher than during the upturn. These findings suggest that firms mitigate market-induced risk with a smaller sacrifice in the expected number of issued patents when the initial weight is primarily on maximizing expected ROIs and when the market is experiencing an upturn instead of a downturn. From the distribution patterns of prioritized firms for the two extreme risk preference points along the upturn and downturn tradeoff frontiers, we find that the target firms shift under different market conditions and risk assumptions. These priority shifts highlight the importance of decision-maker flexibility in structuring firms’ portfolios to support energy R&D, depending on the governments’ risk tolerances and market conditions.

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R&D Spending and Economic Policy Uncertainty in Asian Countries: an Advanced Panel Data Estimation Study

2023

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Long-term economic development requires R&D, and countries develop economic policies that envision innovation development programs. However, economic policy uncertainty frequently distracts from economic outcomes. The study aims to investigate the long-term impact of economic policy uncertainty on R&D, with a particular emphasis on Asian countries. Because the selected countries possess typical dynamics, such as bilateral trade associations, technological expertise, and economic activities, the study employs the second-generation panel cointegration method from 2003 to 2018. The cointegration results of Westerlund ( Oxford Bulletin of Economics and Statistics 69:709-748, 2007) confirmed a stable, long-run relationship between R&D, economic policy uncertainty, economic growth, and trade openness. According to the CS-ARDL findings, an increased economic policy uncertainty reduces R&D. Due to great economic collaboration among Asian countries; the effects are transmitted to R&D, especially international trade, business confidence, and economic growth. As a result, countries divert their resources to deal with the consequences, and investment suffers, whereas economic growth and trade openness help to expand R&D in the long run. It is evident that as economic growth accelerates, countries tend to invest more in R&D, and international trade encourages R&D. To promote prosperity in Asian countries, policymakers must design sound economic policies to counter unexpected events.

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The Negative Impact of Uncertainty on R&D Investment: International Evidence

Cited by 6 publications

References 54 publications

Global outlook of the multiplier effect of research and development on environmental sustainability

Global outlook of the multiplier effect of research and development on environmental sustainability

Creating portfolios of firm-specific energy R&D investment under market uncertainty

R&D Spending and Economic Policy Uncertainty in Asian Countries: an Advanced Panel Data Estimation Study

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