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Dynamics of r&d and investment in the scientific sector.

Lach, Saul and Schankerman, Mark (1989) Dynamics of r&d and investment in the scientific sector. Journal of Political Economy, 97 (4). pp. 880-904. ISSN 0022-3808

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Abstract

This paper empirically explores the dynamic interactions among research and development, capital investment, and the stock market performance of 191 firms in science-based industries during the period 1973-81. Using a framework based on dynamic factor analysis, we test asymmetric specifications of the dynamics between R & D and investment. The data indicate that R & D Granger-causes investment but that investment does not Granger-cause R & D. We discuss interpretations of this causal ordering, characterize the stylized facts of the movements over time of R & D and investment, and measure the stock market valuation of these movements.

Item Type: Article
Official URL: http://www.journals.uchicago.edu/loi/jpe
Additional Information: © 1989 University of Chicago Press
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 23 May 2008 11:31
URL: http://eprints.lse.ac.uk/5035/

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