GP - Research & Development Behavior

Question 1

why do companies invest in R&D and how?

Answer 1

they want to improve their efficiency and provide customized products
through increasing globalization and the infrastructure in communication and transport

Question 2

what are the factors determining R&D activities?

6

Answer 2

• Size of the Firm, positive correlation due to greater resources and reduced investment risk
• Age of the Firm, positive correlation
• Capital Intensity, positive correlation
• Labor Intensity (more skilled labor, higher tendency to invest)
• Selling and Distribution, negative correlation
• Import of Technology positive correlation

Question 3

Flying Geese model in 1 sentence

Answer 3

model describes how developed countries lead industrial innovation which is then adopted by developing countries as industries shift globally

Question 4

how does outsourcing affect R&D?

Answer 4

firms that outsource manufactoring tasks tend to invest more in r&D, possibly to maintain competetive advantages in innovation

Question 5

which industries show the highest R&D activity in foreign-owned firms in India?

Answer 5

pharmaceutical and textiles with foreign manufactoring firms having higher R&D intensity than foreign services firms

Question 6

what is the Heckman 2-step model used for in r&D studies?

Answer 6

used to analyze the differnce between the decision to invest in r&D and the intensity of that investment