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Nonparametric quantile regression analysis of R&D-sales relationship for Korean firms

  • Joon-Woo Nahm
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Part of the Studies in Empirical Economics book series (STUDEMP)

Abstract

This paper applies the nonparametric quantile regression estimation procedure to the analysis of the innovation-firm size relationship using Korean manufacturing firms data. Due to the high asymmetric distribution of R&D expenditure, the mean regression does not capture properly the stylized facts of R&D behavior; hence it underestimates the sales elasticity. Comparing the parametric estimates and nonparametric estimates allows us to see that there exists a nonlinear relationship in innovative activity and sales. Dividing the data into three groups according to the sales volume, the elasticity in the medium-sized firms is the biggest for scientific firms. This result conforms that the findings of Scherer (1965) coincide with findings from Korean manufacturing firms data in the sense that R&D expenditure tends to increase faster than firm size with size up to a point and then more slowly among larger firms. For the non-scientific firms, it steadily increases showing increasing returns to scale

Key words

Quantile regression Nonparametrics Average median derivative 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Joon-Woo Nahm
    • 1
  1. 1.Department of EconomicsSogang UniversitySeoulKorea

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