Estimating the uncertainty–R&D investment relationship and its interactions with firm size

被引:0
作者
Seong-Hoon Cho
Jaimin Lee
机构
[1] University of Tennessee,Department of Agricultural and Resource Economics
[2] Kyungpook National University,School of Economics and Trade
来源
Small Business Economics | 2021年 / 57卷
关键词
Firm size; Number of employees; R&D investment; Sales revenue; Uncertainty; O30; O32; O39; L26;
D O I
暂无
中图分类号
学科分类号
摘要
This paper investigates the uncertainty–research and development (R&D) investment relationship and its interactions with firm size by allowing flexibility in the relationships among uncertainty, R&D investment, and firm size. We hypothesize that the uncertainty effect on R&D investment varies by firm size using South Korean firm-level data. Firm-level uncertainty is measured by variation in a firm’s sales revenue, and firm size is measured by two proxies: the firm’s sales revenue and the firm’s number of employees. We find a concave relationship between the uncertainty elasticity of R&D investment and firm size using separate models for the two firm size proxies. The concave relationship is explained by a change in the dominance of the call option effect, then the put option effect, and then again the call option effect as firm size increases. This relationship serves as an empirically informed knowledge base for policymakers to utilize in evaluating government-funded R&D contracts for encouraging R&D investment.
引用
收藏
页码:1243 / 1267
页数:24
相关论文
共 129 条
[1]  
Abel A(1999)The effects of irreversibility and uncertainty on capital accumulation Journal of Monetary Economics 44 339-377
[2]  
Eberly J(1996)Options, the value of capital, and investment Quarterly Journal of Economics 111 753-777
[3]  
Abel A(2000)Information asymmetry, R&D, and insider gains Journal of Finance 55 2427-2766
[4]  
Dixit A(2009)The knowledge spillover theory of entrepreneurship Small Business Economics 32 15-30
[5]  
Eberly J(2013)The knowledge spillover theory of entrepreneurship Small Business Economics 41 757-774
[6]  
Pindyck R(2005)Empirical testing of different alternative proxy measures for firm size Journal of Applied Business Research 21 7-9
[7]  
Aboody D(2006)The product cycle revisited: knowledge intensity and firm internationalization Management International Review 46 507-528
[8]  
Lev B(1982)Formulation and estimation of dynamic models using panel data Journal of Econometrics 18 47-82
[9]  
Acs Z(2011)Knowledge processes, knowledge intensity and innovation: a moderated median analysis Journal of Knowledge Management 15 1016-1034
[10]  
Braunerhjelm P(1995)Another look at the instrumental variable estimation of error-component models Journal of Econometrics 68 29-51