Abhatoo - Centre Nationale de Documentation

This paper investigates the relationship between initial R&D intensity and firm growth using a unique data set for firms with R&D activities in Austria during the period 1995–2006. Results based on the LAD estimator show that the initial R&D intensity has a positive and significant impact on both employment and sales growth in the subsequent two years. Quantile regressions for each crosssection reveal that the impact of R&D intensity is only significant from 0.3 to the highest quantile of the conditional distribution of employment growth. Furthermore, the elasticity of employment growth with respect to R&D intensity is highest for firms at or slightly below the median of the distribution of firm size. Finally, we find that the R&D coefficient decreases significantly over time.