The paper ‘Into thin air – Using a quantile regression approach to explore the relationship between R&D and innovation‘ by Bernd Ebersberger, Orietta Marsili, Toke Reichstein and Ammon Salter, forthcoming in the International Journal of Applied Economics, is available online.
We apply quantile regression to 760 Finnish firms and show that the relationship between R&D and firm performance is less straight forward than so far assumed. OLS regression analysis fails to capture the effect of R&D expenditure at different locations on the performance distribution. We reveal that R&D matters, especially on the medium quantiles, while regressing against the upper quantiles of the economic gains from innovation distribution exhibit decreasing returns scale in R&D. Our results confirm that Gaussian statistics fail to capture the most interesting part of the distribution – namely the extreme observations located in the tails.
Unfortunately the original pdf-file currently available online contained an illegible table and a rather fuzzy print of the diagrams.
In an updated version the publisher took care about this. The paper is now perfectly legible.