Scandinavian Working Papers in Economics

Working Paper Series,
Trade Union Institute for Economic Research

No 190: Determinants of Firm R&D: Evidence from Swedish Firm Level Data

Patrik Gustavsson () and Andreas Poldahl ()
Additional contact information
Patrik Gustavsson: Stockholm School of Economics and, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden
Andreas Poldahl: ESI, Postal: Örebro University, SE-701 82 Örebro

Abstract: This paper analyses determinants of firm R&D and if predictions from the model of creative destruction is supported by data using matched employer-employee longitudinal data on the Swedish manufacturing industry. In particular, we analyse the impact of competition on R&D. Using various measures of competition, results indicate that competition is likely to contract firm R&D expenditures. We do not find strong support for the expected large-firm advantage in R&D through scale effects. In addition, firm R&D appears positively correlated with its own export and to the R&D-intensity of other firms within the same concern, indicating the existence of knowledge spillovers.

Keywords: R&D; Competition; Firm size; Spillovers

JEL-codes: D40; L11; L60; O31

23 pages, November 10, 2003

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