Investment, R&D and Financial Constraints in Britain and Germany

Stephen Bond, Dietmar Harhoff and John van Reenen ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper analyzes di¤erences in R&D spending and in the impact of R&Don productivity between German and UK ¿rms. We con¿rm that German ¿rmsspend signi¿cantly larger amounts on R&D than their UK counterparts, even aftercontrolling for ¿rm size and industry e¤ects. Using a dynamic production functionapproach, we ¿nd that the R&D output elasticity is approximately the same inboth countries, implying a much larger rate of return on R&D in the UK than inGermany. We discuss several explanations for this result.

Keywords: Corporate governance; R&D; productivity; ¿nancial constraints; paneldata (search for similar items in EconPapers)
JEL-codes: L13 O31 C25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino
Date: 2003-12
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Related works:
Working Paper: Investment, R&D and financial constraints in Britain and Germany (1999)
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0595

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