The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations

Sandro Montresor () and Antonio Vezzani

Research Policy, 2015, vol. 44, issue 2, 381-393

Abstract: This paper aims at showing how quantile estimations can make the analysis of the firm's production function better able to deal with the innovation implications of production. In order to do this, we provide evidence of how top world R&D investors differ in the production impact of their inputs and in their rate of technical change. We use the EU Industrial R&D Investment Scoreboard and carry out a quantile estimation of an augmented Cobb–Douglas production function for a panel of more than 1000 companies, covering the 2002–2010 period. The results of the pooled sample are contrasted with those obtained from the estimates for different groups of economic sectors. Returns to scale are bounded by the size of the firm, but to an extent that decreases with the technological intensity of the sector. The output return of knowledge capital is the largest, irrespective of firm size, but in high-tech sectors only. Elsewhere, physical capital is the pivotal factor, although with size variations. The investigated firms also appear different in their technical progress: embodied in mid-high and low/mid-low tech sectors, and disembodied in high-tech sectors.

Keywords: Production function; R&D; Firm and sector heterogeneity (search for similar items in EconPapers)
JEL-codes: D21 D24 O30 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Working Paper: The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:44:y:2015:i:2:p:381-393

DOI: 10.1016/j.respol.2014.08.005

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