The Influence of Diversification and Market Structure on the R&D Intensity of Large Australian Firms.

This article empirically investigates the determinants of research and development (R&D) intensity for a sample of large Australian firms between 1994 and 1997. Various potential determinants are investigated including firm size, market share, diversification, industry concentration and trade protection. The results indicate that around 20 percent of the variance in R&D intensities can be explained using cross-sectional regression techniques. The results indicate that more focused firms tend to have higher R&D intensities, as do firms with activities in North American and European markets. The level of industry concentration appears to have a negative association with R&D intensity. For manufacturing firms, higher levels of trade protection also have a negative association with R&D intensity. [ABSTRACT FROM AUTHOR]