Persistent Heterogeneity of R&D Intensities Within Sectors: Evidence and Policy Implications

39 Pages Posted: 8 May 2019

Date Written: July 6, 2018

Abstract

Do firms in the same sector converge towards the same R&D intensities? Previous research has often assumed this to be true. A closer examination, using microdata from the EU Industrial R&D Investment Scoreboard for the years 2000-2015, shows considerable heterogeneity in R&D intensities among firms in the same sector, and that this heterogeneity persists over time. Statistical tests of convergence show that the variation in R&D intensities does not decrease over time (i.e. no σ-convergence), although firms with an R&D intensity below the industry average do seem to catch up with the leaders (i.e. evidence of β-convergence). Overall, firms in the same industry do not converge to a common R&D intensity. Policy implications are discussed.

Keywords: R&D Investment, R&D Intensity, Convergence, Benchmarking, Heterogeneity, Evolutionary Theory, Sectoral Systems of Innovation

JEL Classification: O3, L2

Suggested Citation

Coad, Alex, Persistent Heterogeneity of R&D Intensities Within Sectors: Evidence and Policy Implications (July 6, 2018). Research Policy, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3369261

Alex Coad (Contact Author)

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
tokyo, 169-8050
Japan

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