Empirical Models of Firms' R&D

Abstract

This paper is the chapter 18 of the Handbook of Game Theory and Industrial Organization (Vo. II). This chapter is devoted to the empirical models of firms’ R&D. This literature is still growing due to the increasing availability of micro-data. Taking this fact into account, the main purpose of this chapter is to provide an overview of three important topics covered by the recent literature: the determinants of firms’ R&D investment, the link between R&D, innovation and productivity, and the analysis of the R&D black box. This chapter is presented as an invitation to industrial organization practitioners, both theorists and applied, to cross the bridge (and to change sides) between theory and applications.