Macroeconomic Shocks and Corporate R&D
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John D. Burger
und
Kerry M. Tan
Abstract
This paper investigates the impact of output and credit market shocks on R&D spending in advanced economies and builds on the commonly accepted view that credit constraints lead to procyclical R&D spending. A theoretical model is developed where output and credit shocks are treated separately, though these shocks may be highly correlated. The estimation procedure utilizes a panel vector autoregression (VAR) in order to empirically identify the role of credit market shocks separately from the output shocks more commonly studied in the existing literature. The primary empirical findings can be summarized as follows: (1) R&D responds pro-cyclically to output shocks at the macroeconomic level, and (2) R&D co-moves positively with credit. More concretely, the results indicate that negative output shocks induce a simultaneous and subsequent contraction in credit and R&D consistent with a model where credit constraints drive cyclical adjustments to R&D. The impact of output and credit shocks on R&D are economically significant and a simulation exercise suggests the shocks associated with the global financial crisis have reduced US R&D by 10% relative to the pre-crisis path.
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Artikel in diesem Heft
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- Democracy and income: taking parameter heterogeneity and cross-country dependency into account
- Pass-through of imported input prices to domestic producer prices: evidence from sector-level data
- Economic policy uncertainty and household inflation uncertainty
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- Government education expenditures and economic growth: a meta-analysis
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- Life-cycle consumption, precautionary saving, and risk sharing: an integrated analysis using household panel data
- Can removing the tax cap save Social Security?
- A non-monotonic relationship between public debt and economic growth: the effect of financial monopsony
- The Euler equation around the world
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- Contributions
- Trade and growth in a model of allocative inefficiency
- Macroeconomic Shocks and Corporate R&D
Artikel in diesem Heft
- Advances
- Does microfinance reduce poverty? Some international evidence
- Exchange rate policy and the role of non-traded goods prices in real exchange rate fluctuations
- Democracy and income: taking parameter heterogeneity and cross-country dependency into account
- Pass-through of imported input prices to domestic producer prices: evidence from sector-level data
- Economic policy uncertainty and household inflation uncertainty
- Corruption, fiscal policy, and growth: a unified approach
- Monetary policy and energy price shocks
- Government education expenditures and economic growth: a meta-analysis
- Has the forecasting performance of the Federal Reserve’s Greenbooks changed over time?
- Life-cycle consumption, precautionary saving, and risk sharing: an integrated analysis using household panel data
- Can removing the tax cap save Social Security?
- A non-monotonic relationship between public debt and economic growth: the effect of financial monopsony
- The Euler equation around the world
- Structural change and non-constant biased technical change
- Contributions
- Trade and growth in a model of allocative inefficiency
- Macroeconomic Shocks and Corporate R&D
