Evaluation of Relative R&D-led Growth with Specific Reference to Heterogeneous Time-varying R&D Decision: A Novel Approach

Ömer Doruk

Prague Economic Papers, 2023, vol. 2023, issue 3, 273-291

Abstract: The relationship between R&D expenditures and firm growth is examined for a cross-country firm-level dataset for the EU countries in the period from 1989 to 2019. A panel dynamic average treatment effect is estimated using a panel time-varying dynamic difference-in-differences model. The methodology can be counted as novel. The results show a positive and significant relationship between R&D and firm growth within the first five years of R&D investment in the 22 EU countries, over 700 firms and 30 years. The main novelty of the present study comes from examining the time-varying effect of R&D expenditures on firm growth for manufacturing firms in EU countries.

Keywords: R& D; firm growth; EU countries; time-varying R& D-led growth; dynamic time-varying difference in differences; JEL Codes: L25; L29; O00 (search for similar items in EconPapers)
JEL-codes: L25 L29 O00 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.18267/j.pep.832

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