A Structural Empirical Model Of R&D, Firm Heterogeneity And Industry Evolution

Topics:
Organization
Tags:
Business Operations,
Industry,
R&D,
Research & Development
Source:
Pennsylvania State University

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Overview: This paper develops and estimates a structural model of R&D (Research & Development) investment and productivity evolution of manufacturing plants in the Korean electric motor industry from 1991 to 1996. Plant-level decisions for R&D investment, physical capital investment, entry, and exit are developed using an equilibrium industry evolution model. Estimates of the structural parameters are used to quantify whether and how a plant's productivity is affected by its own R&D and by spill-overs from the R&D of its competitors. In contrast to previous R&D studies, which usually investigate a collection of producers from various industries, this paper characterizes how the full set of dynamic decisions by each plant in a single industry interact with its own and its competitor's productivity change.

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Format: PDF | Size: 990KB | Date: Nov 2006 | Pages: 43


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