Corporate Skills as an Ex-Ante Incentive to R&D Investment

27 Pages Posted: 29 Jan 2007

See all articles by Mariacristina Piva

Mariacristina Piva

Universita Cattolica del Sacro Cuore

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano; IZA Institute of Labor Economics

Date Written: January 2007

Abstract

Using a balanced panel of 215 Italian manufacturing firms over the 1995-2000 period, this paper investigates the determinants of R&D investment at the level of the firm. While finding further support for the well-established technology-push and demand-pull hypotheses, this study also tests the role of skill endowment in increasing a firm's R&D investment. Consistently with the related managerial and economic literature, our basic result is that current skill endowment may significantly and positively influence a firm's current R&D decision. These microeconometric results have been obtained using a Least Squares Dummy Variable Corrected (LSDVC) estimator, a recently-proposed panel data technique particularly suitable for small samples.

Keywords: skills and innovation, R&D expenditures, endogenous skill bias, demand-pull, LSDVC estimator

JEL Classification: O31

Suggested Citation

Piva, Mariacristina and Vivarelli, Marco, Corporate Skills as an Ex-Ante Incentive to R&D Investment (January 2007). IZA Discussion Paper No. 2562. Available at SSRN: https://ssrn.com/abstract=960011

Mariacristina Piva

Universita Cattolica del Sacro Cuore ( email )

Via Emilia Parmense, 84
Piacenza
Italy

Marco Vivarelli (Contact Author)

Universita Cattolica del Sacro Cuore, Milano ( email )

Largo Gemelli 1
Milano, 20123
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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