Determination of R&D investment in French firms: a two-part hierarchical model with correlated random effects

Myriam Abdelmoula and Jean Michel Etienne

Economics of Innovation and New Technology, 2010, vol. 19, issue 1, 53-70

Abstract: The aim of this paper is to identify the determinants of Research and development (R&D) investment in French firms. For analysis of covariate effects on R&D expenditures, a two-part model that combines a probit regression on the decision to perform R&D and a linear regression on log-positive expenditures is estimated. This two-part hierarchical model with a correlated random effect's structure accounts for both the skewed nature of firms' R&D expenditures data in French regions and the fact that firms' expenditures are correlated within the regions. In this study, we propose to identify which factors have affected French R&D investment in French manufacturing sectors in 2005. Estimations are based on a sample of 3308 French firms within 19 regions of France.

Keywords: R&D expenditures; French firms; French regions; MCMC; two-part hierarchical model (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:19:y:2010:i:1:p:53-70

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DOI: 10.1080/10438590903016435

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