Allocation of Company Research and Development Expenditures to Industries Using a Tobit Model

Christian Awuku-Budu and Leo Sveikauskas

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This paper uses Census microdata and a regression-based approach to assign multi-division firms’ pre-2008 Research and Development (R&D) expenditures to more than one industry. Since multi-division firms conduct R&D in more than one industry, assigning R&D to corresponding industries provides a more accurate representation of where R&D actually takes place and provides a consistent time-series with the National Science Foundation R&D by line of business information. Firm R&D is allocated to industries on the basis of observed industry payroll, as befits the historic importance of payroll in Census assignments of firms to industry. The results demonstrate that the method of assigning R&D to industries on the basis of payroll works well in earlier years, but becomes less effective over time as firms outsource their manufacturing function.

Keywords: business R&D; industry classification; Tobit model; establishment payroll (search for similar items in EconPapers)
Pages: 20 pages
Date: 2015-11
New Economics Papers: this item is included in nep-bec, nep-ino, nep-knm and nep-sbm
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Citations: View citations in EconPapers (1)

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https://www2.census.gov/ces/wp/2015/CES-WP-15-42.pdf First version, 2015 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:15-42

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