Browsing by Author "Solomon, Edna"

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    Inverted-U relationship between R&D intensity and survival: evidence on scale and complementarity effects in UK data
    (Elsevier, 2016-05-10) Ugur, Mehmet; Trushin, Eshref; Solomon, Edna
    Existing evidence on the relationship between R&D intensity and firm survival is varied and often con-flicting. We argue that this may be due to overlooking R&D scale effects and complementarity betweenR&D intensity and market concentration. Drawing on Schumpeterian models of competition and inno-vation, we address these issues by developing a formal model of firm survival and using a panel datasetof 37,930 of R&D-active UK firms over 1998–2012. We report the following findings: (i) the relationshipbetween R&D intensity and firm survival follows an inverted-U pattern that reflects diminishing scaleeffects; (ii) R&D intensity and market concentration are complements in that R&D-active firms havelonger survival time if they are in more concentrated industries; and (iii) creative destruction as proxiedby median R&D intensity in the industry and the premium on business lending have negative effects onfirm survival. Other findings concerning age, size, productivity, relative growth, Pavitt technology classesand the macroeconomic environment are in line with the existing literature. The results are strongly ormoderately robust to different samples, stepwise estimations, and controls for frailty and left truncation.
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    R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis
    (Elsevier, 2016-08-16) Ugur, Mehmet; Trushin, Eshref; Solomon, Edna; Guidi, Francesco
    The relationship between R&D investment and firm/industry productivity has been investigated widely following seminal contributions by Zvi Griliches and others from late 1970s onwards. We aim to provide a systematic synthesis of the evidence, using 1253 estimates from 65 primary studies that adopt the so-called primal approach. In line with prior reviews, we report that the average elasticity and rate-of-return estimates are positive. In contrast to prior reviews, however, we report that: (i) the estimates are smaller and more heterogeneous than what has been reported before; (ii) residual heterogeneity remains high among firm-level estimates even after controlling for moderating factors; (iii) firm-level rates of return and within-industry social returns to R&D are small and do not differ significantly despite theoretical predictions of higher social returns; and (iv) the informational content of both elasticity and rate-of-return estimates needs to be interpreted cautiously. We conclude by highlighting the implications of these findings for future research and evidence-based policy.