Into Thin Air

Using a Quantile Regression Approach to Explore the Relationship Between R&D and Innovation

Bernd Ebersberger, Orietta Marsili, Toke Reichstein, Ammon Salter

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    Applying quantile regression to 760 Finnish firms, we show that the relationship between R&D and firm performance is less straight forward than so far assumed. OLS regression analysis fails to capture the effect of R&D expenditure at different locations on the performance distribution. We reveal that R&D matters, especially on the medium quantiles, while regressing against the upper quantiles of the economic gains from innovation distribution exhibit decreasing returns scale in R&D. Our results confirm that Gaussian statistics fail to capture the most interesting part of the distribution – namely the extreme observations located in the tails.
    Original languageEnglish
    JournalInternational Review of Applied Economics
    Volume24
    Issue number1
    Pages (from-to)95-102
    Number of pages8
    ISSN0269-2171
    DOIs
    Publication statusPublished - 2010

    Keywords

    • Quantile regression
    • R&D
    • Economic gains from innovation

    Cite this

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    Into Thin Air : Using a Quantile Regression Approach to Explore the Relationship Between R&D and Innovation . / Ebersberger, Bernd; Marsili, Orietta; Reichstein, Toke; Salter, Ammon.

    In: International Review of Applied Economics, Vol. 24, No. 1, 2010, p. 95-102 .

    Research output: Contribution to journalJournal articleResearchpeer-review

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