Template-type: ReDIF-Paper 1.0
Author-Name: Stefan Lutz
Author-Email: stefanhlutz@aol.com
Author-Person: plu92 
Author-Workplace-Name: Royal Docks Business School, University of East London
Title: Does R&D increase the profit contribution of intangible assets? An exploration of European and American automotive supplierss
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 
	intangible assets in the form of intellectual property (IP) and these assets command a return that 
	increases overall profits of the firm. This hypothesis is investigated for the North American and 
	European automotive supplier industries. 
	Results indicate that R&D expenses in fact increase both intangible asset levels and their profit 
	contributions. 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: Productivity; Intellectual property; Royalties; MNE; Transfer pricing.
Note: The views expressed in this paper are those of the author and do not necessarily reflect those of the institutions he 
	is affiliated with. The author would like to thank seminar participants at the University of East London for helpful 
	comments and suggestions and Keshav Goel for diligent research assistance. 
Length: 54 pages 
Creation-Date: 2014-02  
Number: 2014-07 
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae1407.txt
File-URL: https://eprints.ucm.es/id/eprint/24965/1/1407.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:1407