Heterogeneity in the Internationalization of R&D: Implications for Anomalies in Finance and Macroeconomics
- Finance Research Letters, Vol. 26, pp. 132-138
- Patrick Grüning
- Program Area:
- Financial Markets
Empirical evidence suggests that investments in research and development (R&D) by older and larger firms are more spread out internationally than R&D investments by younger and smaller firms. In this paper, I explore the quantitative implications of this type of heterogeneity by assuming that incumbents, i.e. current monopolists engaging in incremental innovation, have a higher degree of internationalization in their R&D technologies than entrants, i.e. new firms engaging in radical innovation, in a two-country endogenous growth general equilibrium model.
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