R&D, Investment and Industry Dynamics

Saul Lach and Rafael Rob
Authors registered in the RePEc Author Service: Rafael Robb

No 4060, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a model of industry evolution where the dynamics are driven by a process of endogenous innovations, followed by subsequent embodiments in physical capital. Traditionally, the only distinction between R&D and physical investment was one of labeling: the first process accumulates an intangible stock (knowledge) while the second accumulates physical capital; both stocks affect output in a symmetric fashion. We argue that the story is not that simple, and there is more to it than differences in the object of accumulation. Our model stresses the causal relationship between past R&D expenditures and current investments in machinery and equipment. This causality pattern, which is supported by the data, also explains the observed higher volatility of physical investment (relative to R&D expenditures).

Date: 1992-04
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Journal of Economic Management and Strategy, vol. 5, no. 2, June 1996, pp. 217-249.
Published as Saul Lach & Rafael Rob, 1996. "R&D, Investment, and Industry Dynamics," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(2), pages 217-249, 06.

Downloads: (external link)
http://www.nber.org/papers/w4060.pdf (application/pdf)

Related works:
Journal Article: R&D, Investment, and Industry Dynamics (1996)
Working Paper: R&D, investment and industry dynamics (1995)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:4060

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w4060

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().