Lumpy investments, factor adjustments, and labour productivity

Abstract

Many people have contributed to this dissertation with kindly offered advice, encouragement, inspiration, support, and friendship. First of all, I wish to thank my supervisor Jarle Møen and cosupervisor Erik Biørn, for patience, supporting advice and thoughtful comments. Special thanks to my co-authors, in alphabetical order, Ådne Cappelen, Øivind A. Nilsen, Arvid Raknerud and Terje Skjerpen for inspiring and insightful discussions. All of them have contributed in numerous ways to this dissertation and have improved my ability to carry out economic research. It has been an honour and a pleasure to work with them. This dissertation is the result of my work on different projects in the Research Department of Statistics Norway. I thank my colleagues in the Research Department for providing an inspiring and pleasant working environment. In particular, I wish to thank, in chronological order, Torbjørn Haegeland, Mads Greaker and Erik Fjaerli, who all have been the head of research units where I have been employed, for embarking with me on this doctoral journey and for providing an opportunity to fulfil it. I also would like to thank the department of Economics, University of Oslo, for having me as a Ph.D. student; the Norwegian School of Economics in Bergen for having me as a guest during spring 2009; and the organizers (the Centre of European Economic Research, ZEW) and participants at the Competition and Innovation Summer School in 2012 for providing a professional and inspiring arena for sharing experience and discussing preliminary work. I acknowledge the financial support from the Research Council of Norway (for the writing of the first, third and fourth papers) and from the Norwegian Ministry of Local Government and Modernisation (for the writing of the final paper). Finally, I thank my family and friends for their love and support. Special thanks to my mother Elena for always believing in me, to my father Vladimir for always challenging me, to my husband Håvard for always supporting me, and to my two children, Katarina and Henrik, for making my doctoral journey more meaningful. Oslo, April 2015 Marina Rybalka Essay 3: The effects of R&D tax credits on patenting and innovations With Ådne Cappelen and Arvid Raknerud Essay 4: Returns to public R&D grants and subsidies With Ådne Cappelen and Arvid Raknerud Essay 5: The innovative input mix: Assessing the importance of R&D and ICT investments for firm performance in manufacturing and services

Dynamics of investment and firm performance: comparative evidence from manufacturing industries

“…There exist however some criteria that inform the identification of a spike measure. As put forth in Nilsen et al (2009) the investment must be large both respect to the history of the firm and to the cross section of the industry. Further, it has to be a rare event, and the definition of the spike must be able to account for a relevant share of total industry investment.…”

“…Further, it has to be a rare event, and the definition of the spike must be able to account for a relevant share of total industry investment. Nilsen et al (2009) also hint at the necessity to account for the relationship that might exist between the investment rate and the capital stock.…”

“…The first three are taken from the literature, respectively from Cooper et al (1999), Power (1998) and Nilsen et al (2009). The last one is our own contribution to the identification of investment spike, and it allows to overcome some of the shortcomings of the other measures.…”

“…As already acknowledged by Nilsen et al (2009), there exists a problem with traditional spike measures which concerns the relation between firm size and investment rate. In order to correct for the excessive volatility of investment of smaller firms, Nilsen et al (2009) propose a rule that, instead Note: The observations are binned into 50 groups and the mean of each bin is represented on the plot -they are shown as "Binned Relation" on the plot.…”

“…A growing stream of literature has indeed started to investigate the relationship between capital adjustment episodes and firm level (performance) characteristics, such as productivity 4 and its growth rate (Power, 1998;Bessen, 1999;Huggett and Ospina, 2001;Nilsen et al, 2009;Shima, 2010), employment growth (Asphjell et al, 2010), sales growth (Licandro et al, 2004) or other factors of production (Sakellaris, 2004;Nilsen et al, 2009). In particular, investment should affect productivity in the long run, as new capital embodies the latest technology (Jensen et al, 2001).…”