a ''hurdle-rate theory of inventive procyclicality'' and offer supportive evidence at the firm level. High-ERP periods … stifle innovation because many R&D projects do not pass corporate budgeting decisions when discount rates are high … with Schumpeter's countercyclical theory, we show that firms engaging in exploratory search suffer less during high …

“hurdle-rate theory of inventive procyclicality”. High-ERP periods stifle innovation because many R&D projects do not pass …Schumpeterian arguments of “creative destruction” predict that innovation is countercyclical. However, empirical … findings demonstrate the contrary. We apply corporate finance principles to macro- and innovation economics and propose a …