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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. "Capital investments and financing structure: Are R&D companies different?," TUT Economic Research Series 26, Department of Finance and Economics, Tallinn University of Technology.
    3. Jorge Juliao Rossi, Julia Pineda Acero, Fernando Barrios Aguirre, 2016. "Contraste entre los determinantes de la inversión en I&D y del registro de patentes en sectores industriales de Colombia," Revista CIFE, Universidad Santo Tomás, March.
    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. 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).
    6. 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.

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