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The relationship between R&D concentration and industry R&D intensity: a simple model and some evidence

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  • Chang-Yang Lee
  • Jaesun Noh

Abstract

This study aims to demonstrate that the concentration (or distribution) of firm R&D intensities within an industry is closely related to the overall R&D intensity of the industry. Unlike the well-studied relationship between sales concentration, or market structure, and industry R&D intensity, the relationship between the concentration of R&D in an industry and its overall R&D intensity has not been explored before. We present a simple model of industry R&D intensity, in which R&D concentration, R&D appropriability, and industry-wide technological opportunities jointly determine industry R&D intensity. In particular, we show that, all else being equal, the more skewed the distribution of firm R&D intensities, the higher the level of industry R&D intensity. We use a six-year panel dataset on the R&D intensities, R&D appropriability, and technological opportunities of four-digit SIC Korean manufacturing industries during the period 1991-1996.

Suggested Citation

  • Chang-Yang Lee & Jaesun Noh, 2009. "The relationship between R&D concentration and industry R&D intensity: a simple model and some evidence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(4), pages 353-368.
    • Handle: RePEc:taf:ecinnt:v:18:y:2009:i:4:p:353-368
    DOI: 10.1080/10438590802159088
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    References listed on IDEAS

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    1. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    2. Kamien,Morton I. & Schwartz,Nancy L., 1982. "Market Structure and Innovation," Cambridge Books, Cambridge University Press, number 9780521293853, December.
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    Cited by:

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    2. Kadri Männasoo & Heili Hein, 2017. "Are R&D companies credit-constrained? Credit frictions during and post-crisis," TUT Economic Research Series 29, Department of Finance and Economics, Tallinn University of Technology.
    3. Kadri Männasoo & Heili Hein, 2017. "Capital investments and financing structure: Are R&D companies different?," TUT Economic Research Series 26, Department of Finance and Economics, Tallinn University of Technology.
    4. Männasoo, Kadri & Meriküll, Jaanika, 2020. "Credit constraints and R&D over the boom and bust: Firm-level evidence from Central and Eastern Europe," Economic Systems, Elsevier, vol. 44(2).
    5. Raghavan J. Iyengar & Malavika Sundararajan, 2019. "Is Firm Innovation Associated With Corporate Governance?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-24, April.
    6. Ferraro, Simona & Männasoo, Kadri & Tasane, Helery, 2023. "How the EU Cohesion Policy targeted at R&D and innovation impacts the productivity, employment and exports of SMEs in Estonia," Evaluation and Program Planning, Elsevier, vol. 97(C).

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