R&D profitability: the role of risk and Knightian uncertainty

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• 作者：Sara Amoroso ; Pietro Moncada-Paternò-Castello ; Antonio Vezzani
• 关键词：R&D investment ; Operating profits ; Uncertainty ; Ambiguity ; Risk premium
• 刊名：Small Business Economics
• 出版年：2017
• 出版时间：February 2017
• 年：2017
• 卷：48
• 期：2
• 页码：331-343
• 全文大小：551KB
• 刊物类别：Business and Economics
• 刊物主题：Management; Microeconomics; Entrepreneurship; Industrial Organization;
• 出版者：Springer US
• ISSN：1573-0913
• 卷排序：48

文摘

This paper provides the first empirical attempt of linking firms’ profits and investment in R&D revisiting Knight’s (Risk, uncertainty and profit, Hart, Schaffner & Marx, Boston, 1921) distinction between uncertainty and risk. Along with the risky profit-maximising scenario, identifying a second, off-setting, unpredictable bias that leads to heterogeneous returns to R&D investments is crucial to fully understand the drivers of corporate profits. Consistently with the Knightian theory that relates risk to profitability, we model the impact of risk and uncertainty on profits and provide a first empirical attempt to model the effect of ambiguity, a particular type of uncertainty, on R&D returns.