Into thin air: using a quantile regression approach to explore the relationship between R&D and innovation

Bernd Ebersberger, Orietta Marsili, Toke Reichstein () and Ammon Salter

International Review of Applied Economics, 2010, vol. 24, issue 1, 95-102

Abstract: Applying quantile regression to 760 Finnish firms, we show that the relationship between R&D and firm performance is less straight forward than so far assumed. OLS regression analysis fails to capture the effect of R&D expenditure at different locations on the performance distribution. We reveal that R&D matters, especially on the medium quantiles, while regressing against the upper quantiles of the economic gains from innovation distribution exhibit decreasing returns scale in R&D. Our results confirm that Gaussian statistics fail to capture the most interesting part of the distribution - namely the extreme observations located in the tails.

Keywords: quantile regression; R&D; economic gains from innovation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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DOI: 10.1080/02692170903424448

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