R&D over the Life Cycle

Mark Sanders, J. Bos and Claire Economidou

No 07-18, Working Papers from Utrecht School of Economics

Abstract: This paper presents a model of the life cycle that drives and is driven by R&D. In the model, firms have the option to improve their quality or to invest R&D resources in efficiency gains. Faced with this tradeoff, young firms opt for quality instead of efficiency improvements, whereas more mature firms will do both. This switch is endogenous and depends on past R&D choices. We explore these two hypotheses empirically using a panel of manufacturing industries across six European countries over the period 1980-1997. Our empirical results provide support for the model’s predictions.

Keywords: Growth; Life Cycle; Innovation; Stochastic Frontier Analysis; Manufacturing Industries (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-ino, nep-mic and nep-tid
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:use:tkiwps:0718

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