Ir&D Project Data and Theories of R&D Investment

24 Pages Posted: 13 Dec 2010 Last revised: 9 Dec 2022

See all articles by Frank R. Lichtenberg

Frank R. Lichtenberg

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: September 1988

Abstract

This paper analyzes data on a large sample of research and development (R&D) projects documented in the Defense Department's Independent R&O Data Bank, both to provide some stylized facts about R&O investment at the project level and to test the implications of a control-theoretical model developed by Grossman and Shapiro. We calculate moments of the marginal distributions and elasticities of cost with respect to time, by type of project (e.g. basic research, development), and discriminate between alternative hypothesis concerning the shape of the hazard function of R&D investment. Consistent with the major implication of the Grossman-Shapiro model, the rate of investment in a project tends to increase as the project approaches completion.

Suggested Citation

Lichtenberg, Frank R., Ir&D Project Data and Theories of R&D Investment (September 1988). NBER Working Paper No. w2720, Available at SSRN: https://ssrn.com/abstract=1722504

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