Revisiting Corporate R&D Spending During a Recession

OVERVIEW:Successful product and process R&D should translate into improved company performance. We would hope that this would be particularly evident in periods of recession when new products or more efficient processes should shield a company from economic decline. This study over two recessions shows that companies that invest heavily in R&D continue to grow while competitors with modest investment suffer sales declines. Model analysis shows that these results are not influenced by company size, type of ownership, or market structure.