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The moderating effect of R&D on firms' mark-ups before the crisis
The effect that the current economic crisis has had on firm margins remains unexplored. The demand shock at a global level has decreased business margins/markups. However, such negative impact has been unequal across firms.
Our objectives are:
  • To estimate firm margins by endogenizing the evolution of productivity regarding firm strategic decisions. We wish to confirm the procyclical (or countercyclical) behaviour of business markups.
  • To assess to what extent firms that carry out R&D investments have performed better during the crisis period.



The paper "El papel de los m�rgenes extensivo e intensivo en el crecimiento de la I+D durante la crisis (2007-2011)", Dolores A��n, Miguel Manj�n, Juan A. M��ez and Juan A. Sanchis examines the evolution of R&D expenditures by the number of firms initiating such activities (extensive margin). The intensive margin is decomposed into i) the persistence of R&D activities for those firms that already carry them, and ii) their intensity. The authors find that the growth rate of R&D expenditures has decreased by 2,59% for small firms whereas it has increased by 0,95% for large firms. Regarding persistence, small firms carry out R&D activities for a median duration of two years; this is longer for large firms. The same qualitative pattern holds regarding intensity. It is interesting to note that the modest growth in R&D expenditures of large firms is mainly explained by the intensive margin (74,4%) rather than by the extensive margin (25,6%). Low tech large firms perform badly in intensive margins. Thus, high tech firms push the global growth in R&D activities.

The contribution Markups, exportaciones e I+D: evidencia para el sector manufacturero en Espa�a (by J. M��ez, M.E. Rochina and J.A. Sanchis), published in Papeles de Econom�a Espa�ola, jointly analyses the relationship between the firms' activities of export and R&D with their mark-ups. The authors use De Loecker and Warzynski (2012) estimation methodology for mark-ups. The data used are drawn from the Spanish survey on firms' strategies, 1993-2009. The results reveal a positive relationship between mark-ups and either only exporting or jointly undertaking this activity with R&D. In addition, the years of crisis seem to point toward a growing importance of innovation activities on higher mark-ups.

The paper Production function estimation in Stata using the Ackerberg-Caves-Frazer method (by M. Manj�n and J.A. M��ez), to appear in The Stata Journal, presents a new eclass command, acfest, that implements the method proposed by Ackerberg et al. (2015) to estimate production functions. This method deals with the functional dependence problems that may arise in the methods proposed by Olley and Pakes (1996) and, particularly, Levinsohn and Petrin (2003) (implemented in Stata by Yasar et al. (2008) and Petrin et al. (2004), respectively). In particular, the acfest command yields (non-linear, robust) GMM estimates using a Mata function and two speci_cation tests (Wald and Sargan-Hansen). After estimation, predict provides the estimated productivity of the firms in the sample.

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Researcher in charge: Rafael Moner-Colonques
Facultad de Economía - Campus de Tarongers
Avda. dels Tarongers s/n - 46022 Valencia (SPAIN)
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