A Portrait of Firms that Invest in R&D

32 Pages Posted: 1 Oct 2016

See all articles by Lucia Foster

Lucia Foster

U.S. Census Bureau - Center for Economic Studies

Cheryl Grim

U.S. Census Bureau - Center for Economic Studies

Nikolas Jason Zolas

U.S. Census Bureau - Center for Economic Studies; University of California, Davis

Date Written: September 01, 2016

Abstract

We focus on the evolution and behavior of firms that invest in research and development (R&D). We build upon the cross-sectional analysis in Foster and Grim (2010) that identified the characteristics of top R&D spending firms and follow up by charting the behavior of these firms over time. Our focus is dynamic in nature as we merge micro-level cross-sectional data from the Survey of Industrial Research and Development (SIRD) and the Business Research & Development and Innovation Survey (BRDIS) with the Longitudinal Business Database (LBD). The result is a panel firm-level data set from 1992 to 2011 that tracks firms’ performances as they enter and exit the R&D surveys. Using R&D expenditures to proxy R&D performance, we find the top R&D performing firms in the U.S. across all years to be large, old, multinational enterprises. However, we also find that the composition of R&D performing firms is gradually shifting more towards smaller domestic firms with expenditures being less sensitive to scale effects. We find a high degree of persistence for these firms over time. We chart the history of R&D performing firms and compare them to all firms in the economy and find substantial differences in terms of age, size, firm structure and international activity; these differences persist when looking at future firm outcomes.

Suggested Citation

Foster, Lucia and Grim, Cheryl and Zolas, Nikolas Jason, A Portrait of Firms that Invest in R&D (September 01, 2016). US Census Bureau Center for Economic Studies Paper No. CES-WP-16-41, Available at SSRN: https://ssrn.com/abstract=2845982 or http://dx.doi.org/10.2139/ssrn.2845982

Lucia Foster (Contact Author)

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Cheryl Grim

U.S. Census Bureau - Center for Economic Studies ( email )

Suitland Federal Center
Washington, DC 20233
United States

Nikolas Jason Zolas

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

University of California, Davis ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

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