Gaining Comparative Advantage Through Discretionary Expenditures: The Returns to R&D and Advertising

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Gary Erickson; Robert Jacobson;
(1992)
  • Journal: Management Science,volume 38,issue 9 September,pages1,264-1,279
  • Related identifiers: doi: 10.1287/mnsc.38.9.1264
  • Subject: R&D, advertising, competitive advantage, stock market return, accounting return, discretionary expenditures
    mesheuropmc: health care economics and organizations

We explore the extent to which R&D and advertising expenditures generate a comparative advantage that allows firms to earn supranormal profits. After controlling for unobserved firm-specific factors and the feedback between discretionary expenditures and profitability, ... View more
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