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This article investigates how a firm's financial strength affects its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from...
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effort and performance. Using data on over 11,000 industrial scientists and engineers (SESTAT 2003), we find that individuals … to benefit innovation more than extrinsic motives such as pay …
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