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The interaction between capital investment and r&d in science-based firms

Lach, Saul and Schankerman, Mark (1987) The interaction between capital investment and r&d in science-based firms. . National Bureau of Economic Research, Cambridge, MA., USA.

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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:
Additional Information: © 1987 Saul Lach and Mark Schankerman
Divisions: Economics
Subjects: H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Date Deposited: 28 May 2008 09:02
Last Modified: 16 May 2024 11:15

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