Prague Economic Papers 2023, 32(3):273-291 | DOI: 10.18267/j.pep.832

Evaluation of Relative R&D-led Growth with Specific Reference to Heterogeneous Time-varying R&D Decision: A Novel Approach

Ömer Tuğsal Doruk ORCID...a
a Adana Alparslan Türkeº Science and Technology University, Department of Business, Adana, Turkey & GLO Fellow, GLO, Essen

The relationship between R&D expenditures and firm growth is examined for a cross-country firm-level dataset for the EU countries in the period from 1989 to 2019. A panel dynamic average treatment effect is estimated using a panel time-varying dynamic difference-in-differences model. The methodology can be counted as novel. The results show a positive and significant relationship between R&D and firm growth within the first five years of R&D investment in the 22 EU countries, over 700 firms and 30 years. The main novelty of the present study comes from examining the time-varying effect of R&D expenditures on firm growth for manufacturing firms in EU countries.

Keywords: R&D, firm growth, EU countries, time-varying R&D-led growth, dynamic time-varying difference in differences, JEL Codes: L25, L29, O00
JEL classification: L25, L29, O00

Received: July 29, 2022; Revised: March 16, 2023; Accepted: March 17, 2023; Published: June 28, 2023  Show citation

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Doruk, Ö.T. (2023). Evaluation of Relative R&D-led Growth with Specific Reference to Heterogeneous Time-varying R&D Decision: A Novel Approach. Prague Economic Papers, 32(3), 273-291. doi: 10.18267/j.pep.832
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