Substitution of Public for Private Research And Development Expenditures

Cover Substitution of Public for Private Research And Development Expenditures
Substitution of Public for Private Research And Development Expenditures
Guy Black
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I r. Lv : ■ 'l- . 1 . : 19 CSI 4'' o to en «-i M o • n s $ g fl "S « d o M u a> S Pk ^ s • ■p «H d S Pi cL hi) o a > 1 o o o tH u •d o a Um d to . C v o •H l4 a cd (d V u.
(0 a a> o « CJ -p hO a d V •H g ^ k) -P V O t> , * 5 3 •a 1 «« d & ^ «s « P l-l ^ o u v> s 10 w ;^^Mnin;i']i . ;•!
W «« •-« O - 20 - sales, the regression is equivalent to ^^•'■p/iCiJEi^ estimated directly from R&D funds, with a correction for size of industry measured by sales.
The significance of these results dep
...ends on the rationale of expressing R&D as a percentage of sales. This ratio is, of course, one of those commonly used in financial analysis, and perhaps is most meaningfully compared with profit as a percentage of sales. Here, because private R & D is usually treated as a current expense, a comparison indicates the degree to which cur- rent profit taking is being postponed in favor of future prof its--that may or may not result from the entrepreneurial venture into R&D.

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