NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Van Anh Vuong

University of Cologne
Faculty of Management, Economics
and Social Sciences
Vogelsanger Strasse 321A
50827 Cologne
Germany

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org

NBER Working Papers and Publications

February 2016Dynamic R&D Choice and the Impact of the Firm's Financial Strength
with Bettina Peters, Mark J. Roberts: w22035
This article investigates how a firm's financial strength affects its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from its credit rating, which is shown to lead to substantial differences in estimates of the costs and expected long- run benefits from R&D investment. Financially strong firms have a higher probability of generating innovations from their R&D investment, and the innovations have a larger impact on productivity and profits. Averaging across all firms, the long run benefit of investing in R&D equals 6.6 percent of firm value. It ranges from 11.6 percent for firms in a strong financial position to 2.3 perc...

Published: Bettina Peters & Mark J. Roberts & Van Anh Vuong, 2017. "Dynamic R&D choice and the impact of the firm's financial strength," Economics of Innovation and New Technology, vol 26(1-2), pages 134-149. citation courtesy of

August 2013Estimating Dynamic R&D Demand: An Analysis of Costs and Long-Run Benefits
with Bettina Peters, Mark J. Roberts, Helmut Fryges: w19374
This paper estimates a dynamic structural model of discrete R&D investment and quantifies its cost and long-run benefit for German manufacturing firms. The dynamic model incorporates linkages between the firm's R&D choice, product and process innovations, and future productivity and profits. The long- run payoff to R&D is measured as the proportional difference in expected firm value generated by the R&D investment. It increases firm value by 6.7 percent for the median firm in high-tech manufacturing industries but only 2.8 percent in low-tech industries. Simulations show that reductions in maintence costs of innovation significantly raise investment rates and productivity while reductions in startup costs have little effect.

Published: "Estimating Dynamic RD Demand: An Analysis of Costs and Long-Run Benefits", with Bettina Peters, Van Anh Vuong, and Helmut Fryges, Rand Journal of Economics, Vol. 48, No. 2 (Summer 2017), pp. 409-437

 
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