CREAT: Census Research Exploration and Analysis Tool

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

November 2015

Working Paper Number:

CES-15-42

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.

Document Tags and Keywords

Keywords Keywords are automatically generated using KeyBERT, a powerful and innovative keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant keywords.

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:
production, economist, econometric, manufacturing, payroll, enterprise, industrial, sale, company, analyst, aggregate, subsidiary, sector, multinational, expenditure, outsourcing

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:
Standard Industrial Classification, Bureau of Labor Statistics, National Science Foundation, Center for Economic Studies, Bureau of Economic Analysis, National Income and Product Accounts, Permanent Plant Number, Longitudinal Business Database, Survey of Industrial Research and Development, Economic Census, Wholesale Trade, North American Industry Classification System, Census Bureau Business Register, Business Research and Development and Innovation Survey

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