R&D profitability: the role of risk and Knightian uncertainty

This paper provides the first empirical attempt of linking firms’ profits and investment in R&D revisiting Knight’s (1921) distinction between uncertainty and risk. Along with the risky profit-maximizing scenario, identifying a second, off-setting, unpredictable bias that leads to heterogeneous returns to R&D investments is crucial to fully understand the drivers of corporate profits.

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Year of publication:	2015
Authors:	Amoroso, Sara ; Moncada-Paternò-Castello, Pietro ; Vezzani, Antonio
Publisher:	Seville : European Commission, Joint Research Centre (JRC)
Subject:	Corporate R&D investment \| firms’ operating profits \| Knightian uncertainty \| ambiguity.

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Series:	IPTS Working Papers on Corporate R&D and Innovation ; 01/2015
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	1067820752 [GVK] hdl:10419/202153 [Handle] RePEc:ipt:wpaper:201501 [RePEc]
Classification:	O30 - Technological Change; Research and Development. General ; d22 ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	EconStor

Persistent link: https://www.econbiz.de/10012055276