“…To measure returns on R&D investments, we divide R&D expenditures by total assets at the beginning of the year ( R&D ), also used by Ghosh, Moon, and Tandon (2007) to proxy for discretionary investments in R&D. As a robustness check, we use R&D expenditures. Specifically, we divide R&D expenditure by total sales, which is commonly known as R&D intensity ( R&D1 ) (Cohen & Levinthal, 1989; Guedes, da Conceição Gonçalves, Soares, & Valente, 2016; Kim et al, 2008; Lee & O'neill, 2003).…”