R&D DYNAMICS AND FIRM GROWTH: THE IMPORTANCE OF R&D PERSISTENCY IN THE ECONOMIC CRISIS

Hayoung Park, Taewon Kang and Jeong-Dong Lee ()
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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

International Journal of Innovation Management (ijim), 2019, vol. 23, issue 05, 1-24

Abstract: 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)
Date: 2019
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DOI: 10.1142/S136391961950049X

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