Template-type: ReDIF-Paper 1.0
Author-Name: Stefan Lutz
Author-Email: stefan.lutz@manchester.ac.uk
Author-Person: plu92 
Author-Workplace-Name: Economics, University of Manchester
Title: R&D, IP, and firm profits in the automotive supplier industry
Abstract: Economic theory implies that research and development (R&D) efforts increase firm productivity and 
	ultimately profits. In particular, R&D expenses lead to the development of intellectual property (IP) 
	and IP commands a return that increases overall profits of the firm. This hypothesis is investigated for 
	the North American automotive supplier industry by analyzing a panel of 5000 firms for the years 1950 to 2011.
	Results indicate that R&D expenses in fact increase profitability at the firm level. In particular, increases
	in the R&D expense to sales ratio lead to increases in the profit contribution of intangible assets relative 
	to sales. This indicates that more R&D intensive IP should command higher royalty rates per sales when 
	licensed to third parties and within multinational enterprises alike.
Classification-JEL: D24, L20, L62, M21.

Keywords: Evaluating forecasts, Macroeconomic forecasting, Rationality, Intuition, Weak-form efficiency, Fixed-event forecasts.
Length: 18 pages 
Creation-Date: 2013 
Number: 2013-15 
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae1315.txt
File-URL: https://eprints.ucm.es/id/eprint/21270/1/1315.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:1315