Further considerations on the link between adjustment costs and the productivity of R&D investment: evidence for Spain
This article constructs a dynamic model to estimate the impact of adjustment costs on the productivity of investment in R&D. In order to take into account the possible endogeneity of adjustment costs, the model is estimated by means of instrumental variables (IV), using a panel of Spanish companies. The results show that the elasticity of the productivity of R&D investment with regard to adjustment costs is high, with a value close to -1 (-0.96). This confirms that it is essential to include adjustment costs in the empirical analysis of R&D productivity, as suggested by Jones and Williams (1998) and Comin (2002, 2004).
Year of publication: |
2009
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Authors: | Romero-Jordan, Desiderio ; Sanz-Sanz, Jose Felix ; Alvarez-Ayuso, Inmaculada |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 16.2009, 14, p. 1471-1476
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Publisher: |
Taylor & Francis Journals |
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