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Cambridge Journal of Economics 23:385-399 (1999)
Copyright © 1999 Cambridge Political Economy Society


Article

Note and comment. Keynes-plus? Effective demand and changes in firm-level R&D: an empirical note

E Brouwer and A Kleinknechtz

University of Amsterdam, Amsterdam, The Netherlands
z Delft University of Technology, Delft, The Netherlands

Abstract

Analysing changes over time in firm-level R&D efforts, we find that demand growth in a firm's sector of principal activity has a positive influence on changes in a firm's R&D effort, confirming Schmookler's (1969) 'demand-pull' hypothesis. This finding points to an aspect of effective demand which has never been directly noticed by Keynes or the Keynesians. Such findings are important because of evidence in the literature that a firm's innovation activities are positively related to employment growth, export intensity and profits.


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