GP - Research & Development Behavior Flashcards
why do companies invest in R&D and how?
they want to improve their efficiency and provide customized products
through increasing globalization and the infrastructure in communication and transport
what are the factors determining R&D activities?
6
- Size of the Firm, positive correlation due to greater resources and reduced investment risk
- Age of the Firm, positive correlation
- Capital Intensity, positive correlation
- Labor Intensity (more skilled labor, higher tendency to invest)
- Selling and Distribution, negative correlation
- Import of Technology positive correlation
Flying Geese model in 1 sentence
model describes how developed countries lead industrial innovation which is then adopted by developing countries as industries shift globally
how does outsourcing affect R&D?
firms that outsource manufactoring tasks tend to invest more in r&D, possibly to maintain competetive advantages in innovation
which industries show the highest R&D activity in foreign-owned firms in India?
pharmaceutical and textiles with foreign manufactoring firms having higher R&D intensity than foreign services firms
what is the Heckman 2-step model used for in r&D studies?
used to analyze the differnce between the decision to invest in r&D and the intensity of that investment