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EU-US differences in the size of R&D intensive firms

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Abstract

The average firm size of the top R&D investors among US-based companies is smaller than that of the EU-based firms. Does this help to explain why the US has a greater R&D intensity, or is the higher firm size in the EU, just as its lower R&D intensity, determined by the sectors in which the top R&D investors are operating? Using data on the top-R&D investors from the 2006 EU Industrial R&D Investment Scoreboard, the size differential between R&D performers in the EU and US is more closely examined. A first observation is that, despite great differences between sectors, the overall distribution of companies' R&D investments in both economies is remarkably similar, as opposed to the distribution of the R&D/sales ratios of the same two sets of companies. The notion that size plays a role, independent of the sectoral composition of R&D, is then confirmed by regression analysis. In the US as well as in the EU, smaller sized Scoreboard companies tend to spend a larger proportion of their income from sales on R&D.

Suggested Citation

  • Raquel Ortega-Argilés & Andries Brandsma, 2009. "EU-US differences in the size of R&D intensive firms," JRC Working Papers on Corporate R&D and Innovation 2009-2, Joint Research Centre.
    • Handle: RePEc:ipt:wpaper:20092
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    Cited by:

    1. Yvonne McNulty & Chris Brewster, 2016. "Theorizing the Meaning(s) of 'Expatriate': Establishing Boundary Conditions," John H Dunning Centre for International Business Discussion Papers jhd-dp2016-05, Henley Business School, University of Reading.
    2. Cevikarslan, Salih, 2013. "Optimal patent length and patent breadth in an R&D driven market with evolving consumer preferences: An evolutionary multi-agent based modelling approach," MERIT Working Papers 2013-020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Davide Castellani & Mariacristina Piva & Torben Schubert & Marco Vivarelli, 2018. "The source of the US /EU Productivity Gap:Less and less effective R&D," LEM Papers Series 2018/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Castellani, Davide & Piva, Mariacristina & Schubert, Torben & Vivarelli, Marco, 2019. "R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 279-291.
    5. Castellani, Davide & Piva, Mariacristina & Schubert, Torben & Vivarelli, Marco, 2016. "The Productivity Impact of R&D Investment: A Comparison between the EU and the US," IZA Discussion Papers 9937, Institute of Labor Economics (IZA).
    6. Pietro Moncada-Paterno-Castello & Peter Voigt, 2013. "The effect of innovative SMEs' growth to the structural renewal of the EU economy - A projection to the year 2020," JRC Research Reports JRC83400, Joint Research Centre.
    7. Raquel Ortega-Argilés, 2012. "The Transatlantic Productivity Gap: A Survey Of The Main Causes," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 395-419, July.

    More about this item

    Keywords

    Research and Development intensity; EU-US R&D gap; size of firms;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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