Into thin air: Using a quantile regression approach to explore the relationship between R&D and innovation.

B Ebersberger, Orietta Marsili, T. Reichstein, A Salter

Research output: Contribution to journalArticle

21 Citations (Scopus)

Abstract

Applying quantile regression to 760 Finnish firms, we show that the relationship between R&D and firm performance is less straight forward than so far assumed. OLS regression analysis fails to capture the effect of R&D expenditure at different locations on the performance distribution. We reveal that R&D matters, especially on the medium quantiles, while regressing against the upper quantiles of the economic gains from innovation distribution exhibit decreasing returns scale in R&D. Our results confirm that Gaussian statistics fail to capture the most interesting part of the distribution – namely the extreme observations
Original languageEnglish
Pages (from-to)95-102
Number of pages8
JournalInternational Review of Applied Economics
Volume24
Issue number1
Early online date27 Jan 2010
DOIs
Publication statusPublished - Jan 2010

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