Market value, R&D and intellectual property:an empirical analysis of large Australian firms

This paper considers the value of innovation to large Australian firms. Specifically, we investigate how R&D and intellectual property activity influences the market value of firms, using a Tobin’s q approach. R&D data are available for the period 1994–96 and data on patent, trade mark and design applications for 1996. The findings suggest that R&D and patent activity are positively and significantly associated with market value. The results also suggest that private returns to R&D in Australia are low by international standards.

R&D and productivity:using UK firm-level data to inform policy

The UK's business R&D (BERD) to GDP ratio is low compared to other leading economies, and the ratio has declined over the 1990s. This paper uses data on 719 large UK firms to analyse the link between R&D and productivity during 1989-2000. The results indicate that UK returns to R&D are similar to returns in other leading economies and have been relatively stable over the 1990s. The analysis suggests that the low BERD to GDP ratio in the UK is unlikely to be due to direct financial or human capital constraints (as these imply finding relatively high rates of return). © Springer Science+Business Media, LLC 2009.

Estimating the impact of R&D on productivity using the BERD-ARD data

The UK has a relatively low ratio of business R&D to GDP (the BERD ratio) compared to other leading economies. There has also been a small decline in UK’s BERD ratio in the 1990s, whereas other leading economies have experienced small rises. The relatively low BERD ratio cannot be explained solely by sectoral or industry-level differences between the UK and other countries. There is, therefore, considerable interest in understanding the firm-level determinants of investment in R&D. This report was commissioned by the DTI to analyse the link between R&D and productivity for a sample of firms derived from merging the ONS’s Business Research and Development Database (BERD) and the Annual Respondents Database (ARD). The analysis estimates the private rates of returns to R&D, and not the social rates of return, since it is the private returns that should drive firms’ decisions. A key objective of this research is to analyse the productivity of R&D in small and medium sized enterprises (SME). The analysis is intended to allow comparisons to the results in Rogers (2005), which uses publicly available data on R&D in medium to large UK firms in the 1990s.