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The relationship between profit-sharing schemes and R&D activities: evidence from German firm-level data

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  • Diego d’Andria
  • Silke Uebelmesser

Abstract

We study the determinants of the use of profit sharing schemes (PSS) by private companies, exploiting a firm-level dataset for Germany. First, our results from static regression models replicate studies for the U.S. which report a positive correlation between R&D activity and PSS use. Similar to those studies, we find that a firm’s turnover is strongly associated with PSS use, whereas this does not hold for the age of a firm. Firms with an unionised or more qualified workforce are also associated with PSS use. By exploiting the panel structure of our data, we also provide a novel set of tests by means of dynamic models estimation. The analysis sheds light on the relation between R&D activity, past innovation and PSS use.

Suggested Citation

  • Diego d’Andria & Silke Uebelmesser, 2021. "The relationship between profit-sharing schemes and R&D activities: evidence from German firm-level data," Industry and Innovation, Taylor & Francis Journals, vol. 28(8), pages 990-1016, September.
    • Handle: RePEc:taf:indinn:v:28:y:2021:i:8:p:990-1016
    DOI: 10.1080/13662716.2021.1929866
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