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This research examines how factors beyond the firm influence R&D response following underperformance.

Beyond the firm: how government R&D support and digital capacity shape firms’ R&D response to underperformance

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This research examines how factors beyond the firm influence R&D response following underperformance.
Analyzed a 10-year panel of manufacturing firms to examine R&D responses to underperformance.
Developed a framework to assess the impact of government R&D support and digital capacity on R&D intensity.
Used econometric tests to ensure robustness of findings across different specifications.
Underperformance is positively associated with increased R&D intensity.
Government R&D support amplifies the response of R&D intensity, especially where digital capacity is high.
Results remain consistent across various econometric tests describing relationships over time.

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Randomized trial shows R&D intensity increases in firms after underperformance, highlighting government roles.

Hamrabadi et al. (2026) studied this question.

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