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Growth, profits and R&D investment

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  • Sanghoon Lee

Abstract

This study uses firm-level panel data from Korea over the period 1990–2012 to examine the relationship between growth, profitability and R&D investment. The empirical results show that (i) the effect of profits on growth is negative, which, however, isy significant only after the financial crisis; (ii) the effect of growth on profits is insignificant, but a positive relationship is found before the crisis and for old firms; and (iii) there is an inverse U-shaped relationship between R&D investment and cash flow, and the effect of cash flow on R&D investment is positive before the crisis and for non-group firms. The empirical results reflect the institutional setting and historical context of Korea. Theoretical and practical implications are discussed.

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  • Sanghoon Lee, 2018. "Growth, profits and R&D investment," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 31(1), pages 607-625, January.
    • Handle: RePEc:taf:reroxx:v:31:y:2018:i:1:p:607-625
    DOI: 10.1080/1331677X.2018.1432380
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    Cited by:

    1. Alfonso Jesús Torres Marín, 2020. "Learning Lessons from the Economic Crisis in Self-employment," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(1), March.

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