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Keynes-plus? Effective demand and changes in firm-level R&D: an empirical note

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  • Brouwer, Erik

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Kleinknecht, Alfred

Abstract

Analyzing changes over time in firm-level R&D efforts we find that demand growth in a firm’s sector of principal activity has a positive influence on changes in a firm’s R&D effort, confirming Schmookler’s (1969) ‘demand-pull’ hypothesis. This finding points to an aspect of effective demand which has never been directly noticed by Keynes or the Keynesians. Such findings are important because of evidence in the literature that a firm’s innovation activities are positively related to employment growth, export intensity and profits.

Suggested Citation

  • Brouwer, Erik & Kleinknecht, Alfred, 1997. "Keynes-plus? Effective demand and changes in firm-level R&D: an empirical note," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    • Handle: RePEc:vua:wpaper:1997-38
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    References listed on IDEAS

    as
    1. Walsh, Vivien, 1984. "Invention and innovation in the chemical industry: Demand-pull or discovery-push?," Research Policy, Elsevier, vol. 13(4), pages 211-234, August.
    2. Branstetter, Lee & Crepon, Bruno & Hall, Bronwyn H. & Mairesse, Jacques, 1995. "The Time Series Relationship Between Investment and Cash Flow in the Scientific Sector: A Panel Data Study Comparing French, Japanese, and the United States Firms," Department of Economics, Working Paper Series qt9tr0867s, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    3. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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