R&D, Investment and Industry Dynamics

J. OF ECONOMICS AND MANAGEMENT STRATEGY

Posted: 9 Jul 1998

See all articles by Saul Lach

Saul Lach

Hebrew University of Jerusalem - Department of Economics; CEPR

Rafael Rob

University of Pennsylvania - Department of Economics

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Abstract

We present a model of industry evolution where the dynamics are driven by a process of endogenous innovations followed by subsequent embodiments in physical capital. Our model stresses the causal relationship between past R&D expenditures and current investments in machinery and equipment. This causality pattern, supported by U.S. manufacturing data, also explains the observed higher volatility of physical investment relative to R&D expenditures.

JEL Classification: O32, L16

Suggested Citation

Lach, Saul and Rob, Rafael, R&D, Investment and Industry Dynamics. J. OF ECONOMICS AND MANAGEMENT STRATEGY, Available at SSRN: https://ssrn.com/abstract=7233

Saul Lach (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
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+972 2 581 6071 (Fax)

HOME PAGE: http://economics.huji.ac.il/facultye/saul/saul.html

CEPR

London
United Kingdom

Rafael Rob

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-6775 (Phone)
215-573-2057 (Fax)

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