R&D restructuring during the Great Recession and young firms

María García-Vega

No 2020-09, Discussion Papers from University of Nottingham, GEP

Abstract: In this paper, I provide evidence of automation and skill-upgrading of R&D for young firms during the Great Recession of the late 2000s (henceforth abbreviated as GR). Using a difference-in-difference approach and propensity score matching, for a panel of more than 12,000 Spanish firms from 2005 to 2014, I examine if the GR had an effect on the organization of R&D in young versus older firms. I find that young firms adjust their R&D employment during the GR. I show that young firms implemented three key compositional changes in their R&D policies during the GR as compared to older firms: a) they reduced their R&D employment by firing medium-skilled R&D workers; b) they hired high-skilled R&D workers; and c) they increased their capital investments for R&D. These changes in R&D policies suggest that during the GR, young firms substituted medium-skilled R&D workers by high-skilled workers and machines. These effects are mediated by the firms’ financial health.

Keywords: Young firms; Great Recession; Firm performance; R&D; Innovation; Automation; skillupgrading; Job polarization. (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ent, nep-ino, nep-mac, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:2020-09

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