R&D profitability: the role of risk and Knightian uncertainty

Sara Amoroso, Pietro Moncada-Paternò-Castello and Antonio Vezzani

No 2015-01, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: This paper provides the first empirical attempt of linking firms profits and investment in R&D revisiting Knights (1921) distinction between uncertainty and risk. Along with the risky profit-maximizing scenario, identifying a second, off-setting, unpredictable bias that leads to heterogeneous returns to R&D investments is crucial to fully understand the drivers of corporate profits.

Keywords: Corporate R&D investment; firms operating profits; Knightian uncertainty; ambiguity. (search for similar items in EconPapers)
JEL-codes: D22 D81 O30 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2015
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: R&D profitability: the role of risk and Knightian uncertainty (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201501

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