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- Title
SCALE ECONOMIES IN RESEARCH AND DEVELOPMENT: A REPLY.
- Authors
Kohn, Meir; Scott, John T.
- Abstract
The article comments on the article "Returns to Scale in R&D and the Schumpeterian Hypothesis," by Arun K. Mukhopadhyay that appeared in the March 1985, issue of the "Journal of Industrial Economics." Mukhopadhyay objects to the use of the term "empirical test" and to the fact that one aspect of authors' conclusions follows from their assumptions which characterize increasing returns to scale in the product of R&D and characterize the value added of R&D. First, Corollary clearly states that the relation that Mukhopadhyay addresses holds. Second, the complaint that the authors' "test" does not allow refutation of the theory misinterprets their use of the idea of an empirical test. Economists Franklin M. Fisher and Peter Temin set out to ask what if anything could be inferred about the relation between R&D output and firm size via observation of input-size relations. That is not an uninteresting question because it is easier to measure inputs than to measure outputs. Patents, for example, are an imperfect indicator of R&D outputs. Authors' notion of an empirical test is based on the need to learn from observation about whether a phenomenon does occur even though they cannot observe it directly.
- Subjects
ECONOMIES of scale; INDUSTRIAL research; BUSINESS enterprises; INPUT-output analysis; RESEARCH &; development; FISHER, Franklin M.; TEMIN, Peter, 1937-; ECONOMISTS; PATENTS
- Publication
Journal of Industrial Economics, 1985, Vol 33, Issue 3, p363
- ISSN
0022-1821
- Publication type
Article
- DOI
10.2307/2098545