Abstract

This article studies the relationship between research and development intensity and growth performance during economic downturns at the industry level. Industries that are more research and development-intensive tend to perform better during downturns than industries that are less research and development-intensive. The panel fixed-effects estimations show that this link is particularly strong among manufacturing industries and is robust to various sensitivity checks. These results are consistent with previous firm-level studies that find innovating firms are much less sensitive to a particular cyclical shock than are non-innovating firms.

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