A Note on R&D and Price Elasticity of Demand

Philipp J.H. Schröder; Dieter Schumacher; Dorothea Lucke

A Note on R&D and Price Elasticity of Demand

Philipp J.H. Schröder, Dieter Schumacher, Dorothea Lucke

GlobID -Globalization and Industry Dynamics

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaper › Journal article › Research › peer-review

1 Citation (Scopus)

Abstract

This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports.

Original language	English
Journal	Jahrbuecher fuer Nationaloekonomie und Statistik
Volume	226
Issue	6
Pages (from-to)	688-698
Number of pages	11
ISSN	0021-4027
Publication status	Published - 2005

Cite this

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title = "A Note on R&D and Price Elasticity of Demand",

abstract = "This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports.",

author = "Schr{\"o}der, {Philipp J.H.} and Dieter Schumacher and Dorothea Lucke",

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TY - JOUR

T1 - A Note on R&D and Price Elasticity of Demand

AU - Schröder, Philipp J.H.

AU - Schumacher, Dieter

AU - Lucke, Dorothea

PY - 2005

Y1 - 2005

N2 - This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports.

AB - This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand. This proposition is confirmed by an empirical investigation of export demand for manufactured goods from major industrialised countries. Consequently, real exchange rate changes have an impact on the commodity structure of exports.

M3 - Journal article

SN - 0021-4027

VL - 226

SP - 688

EP - 698

JO - Jahrbuecher fuer Nationaloekonomie und Statistik

JF - Jahrbuecher fuer Nationaloekonomie und Statistik

IS - 6

ER -

A Note on R&D and Price Elasticity of Demand

Abstract

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