The path of R&D efficiency over time

Pilar Beneito, María Engracia Rochina-Barrachina and Amparo Sanchis-Llopis
Authors registered in the RePEc Author Service: Maria Engracia Rochina Barrachina

International Journal of Industrial Organization, 2015, vol. 42, issue C, 57-69

Abstract: In this paper we investigate the pattern of R&D efficiency in terms of the number of product innovations achieved by firms over time. Using a panel dataset of Spanish manufacturing firms for the period 1990–2006, we follow the innovative performance of R&D active firms and observe that innovation rates change over firms' R&D histories. To explain these facts we propose a model that explicitly acknowledges the twofold composition of firms' R&D expenditures, comprising spending on both physical capital for R&D projects and payments to researchers. We regard this latter component of R&D as a source for dynamic returns to firms' R&D investments. Consequently firms' innovation outcomes clearly depend on how long they have been investing in R&D and also on whether there have been any interruptions in the temporal sequence of R&D activities. Our results suggest that R&D activities exhibit dynamic returns that are positive but at a decreasing rate, and that interruptions in R&D engagement reduce R&D efficiency.

Keywords: R&D; Product innovation; Dynamic returns; Interruptions in R&D; Forgetting; Count data (search for similar items in EconPapers)
JEL-codes: C1 L2 O3 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: The Path of R&D Efficiency over Time (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:42:y:2015:i:c:p:57-69

DOI: 10.1016/j.ijindorg.2015.07.001

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