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Differences in the rates of return to R&D for European and US young leading R&D firms

Michele Cincera () and Reinhilde Veugelers ()

Research Policy, 2014, vol. 43, issue 8, 1413-1421

Abstract: This paper examines the sources of Europe's lagging business R&D performance relative to the US, particularly the role played by missing young leading innovators in high technology intensive sectors in Europe. It investigates through econometric analysis differences in the rates of return to R&D of European and US large R&D firms. It finds that, while in the US, young firms succeed in realizing significantly higher rates of return to R&D as compared to their older counterparts, including in high-tech sectors, European firms fail to generate significant rates of return, even if they are Yollies and even if they are in high-tech sectors. These findings can at least partly explain why Europe has less R&D intensive young leading innovators in high technology intensive sectors.

Keywords: Young firms; Rate of return to R&D; EU–US R&D gap (search for similar items in EconPapers)
JEL-codes: O33 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Differences in the rates of return to R&D for European and US young leading R&D firms (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:43:y:2014:i:8:p:1413-1421

DOI: 10.1016/j.respol.2014.03.004

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