Industrial Research Labs and R&D Productivity

62 Pages Posted: 6 Jun 2023

See all articles by Anne Marie Knott

Anne Marie Knott

Washington University in St. Louis - John M. Olin Business School

Natalya Vinokurova

Lehigh University

Date Written: April 25, 2023

Abstract

One explanation for declining R&D productivity is demise of industrial research labs. We test that explanation using data from U.S. industrial lab directories from 1921 to 1998. We find the number, size and prevalence of labs have all increased rather than declined. Accordingly, we consider the opposite possibility: that the rise in labs contributed to the decline in R&D productivity. There we find that labs decrease firms’ R&D productivity 5.2%, on average. Using both aggregate data and comparative case studies, we find this “lab penalty” stems from labs’ parochialism—pursuing scientific goals at the expense of commercial goals.

Keywords: research lab, R&D productivity, RQ, innovation

JEL Classification: D24, E23, O30, 047

Suggested Citation

Knott, Anne Marie and Vinokurova, Natalya, Industrial Research Labs and R&D Productivity (April 25, 2023). Available at SSRN: https://ssrn.com/abstract=4453884 or http://dx.doi.org/10.2139/ssrn.4453884

Anne Marie Knott (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States

Natalya Vinokurova

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

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