R&D DYNAMICS AND FIRM GROWTH: THE IMPORTANCE OF R&D PERSISTENCY IN THE ECONOMIC CRISIS
Taewon Kang and
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Hayoung Park: Technology Management, Economics and Policy Program (TEMEP), Seoul National University, Seoul, Republic of Korea
Taewon Kang: Technology Management, Economics and Policy Program (TEMEP), Seoul National University, Seoul, Republic of Korea2Institute of Engineering Research, Seoul National University, Seoul, Republic of Korea
Jeong-Dong Lee: Technology Management, Economics and Policy Program (TEMEP), Seoul National University, Seoul, Republic of Korea
International Journal of Innovation Management (ijim), 2019, vol. 23, issue 05, 1-24
There has been a lot of interest in R&D dynamics, including the persistency and volatility of R&D investment. However, there is a lack of empirical evidence supporting the impact of R&D dynamics on firm growth in the context of an economic crisis. This study examines the effects of R&D dynamics on firm growth during and after the global financial crisis of 2008–2009. Based on firm-level data, we construct a balanced panel for 1,137 firms in the global petrochemical industry. Our findings indicate that firms with R&D persistency show higher growth during and after the crisis, regardless of firm size. R&D persistency has a higher impact on firm growth in large firms than in smaller ones. In addition, R&D persistency has greater influence than the level of R&D investment. Firms should pursue non-cyclical and consistent R&D strategies with a long-term perspective, especially in high uncertainty conditions.
Keywords: R&D dynamics; R&D persistency; R&D strategy; firm growth; economic crisis (search for similar items in EconPapers)
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