Drivers of International Research Spending

There has been significant theoretical and empirical research on the causes and effects of research and development (R&D) spending; however, the incentives of individual firms to engage in such an investment, especially firms that differ in characteristics and the institutional settings they operate in, are not well understood. This monograph adds to the literature on the economics of technical change, with a primary focus on research spending as the key input in innovation, in two ways. First, it provides an overview and a critical appraisal of the literature on the drivers of research spending, especially focusing on the extant empirical studies in recent years. Second, it provides estimation results from the determinants of research spending across a large sample of mostly emerging nations using data at the firm level. Based on these findings, implications for technology policies and directions for future research are discussed.