J. Zietz et B. Fayissa, THE IMPACT OF EXCHANGE-RATE CHANGES ON INVESTMENT IN RESEARCH-AND-DEVELOPMENT, The Quarterly review of economics and finance, 34(2), 1994, pp. 195-211
Panel data on 360 U.S. manufacturing firms over the years 1975 to 1987
are used to identify the response of RED spending to exchange rate ch
anges. Only firms in industries with average RED spending of at least
3 percent of sales revenue react to an exchange rate appreciation with
increased RED spending. Firms in industries with lower levels of RED
intensity do not. This finding can be interpreted to mean that only RE
D intensive firms react to an increase in competitive pressure with mo
re RED effort.