Lach, Saul and Schankerman, Mark (1987) The interaction between capital investment and r&d in science-based firms. 2377. National Bureau of Economic Research, Cambridge, MA., USA.
Abstract
This paper analyzes the interaction among R&D, capital investment , and the stock market rate of return for 191 firms in science-based industries for the period 1973-1981. Using a framework based on dynamic factor analysis, we show how several prominent hypotheses about the determination of R&D and investment generate testable parameter restrictions. The data indicate that R&D Granger-causes investment, but that investment does not Granger-cause R&D. We use this finding to examine the validity of those hypotheses, to characterize the movements over time of R&D and investment, and to measure the stock market valuation of these movements.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Official URL: | http://www.nber.org |
| Additional Information: | © 1987 Saul Lach and Mark Schankerman |
| Library of Congress subject classification: | H Social Sciences > HG Finance H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor |
| Sets: | Collections > Economists Online Departments > Economics Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) |
| Identification Number: | 2377 |
| Date Deposited: | 28 May 2008 09:02 |
| URL: | http://eprints.lse.ac.uk/5104/ |
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