What governs firm-level R&D: Internal or external factors?
William Griffiths, Elizabeth Webster
TECHNOVATION | ELSEVIER SCIENCE BV | Published : 2010
Two parallel streams of research investigating the determinants of corporate R&D exist: one from economics and the other from management. The economists' variables tend to reflect the firm's external environment while the explanatory variables used by management scientists are commonly internal to the firm. This paper combines both approaches to test for the relative importance of each type of factor using firm-level data on large Australian companies from 1990 to 2005. Our evidence suggests that most of a firm's R&D activity can be explained by time-invariant factors which we believe relate to internal and specific characteristics such as the firm's managerial dimensions, competitive strate..View full abstract