The Importance of Cultural Factors in R&D Intensity

Research and development (R&D) investments are a key issue for companies. In an increasingly competitive economy, R&D can be a source of competitive advantage. Therefore, a profuse research line on the reasons that can motivate firms for R&D investment has emerged. Theoretical frameworks include the resource-based theory, the creative destruction model, the domestic competitive pressure model, and the exposure to international competition model, among others. However, the culture of the country is not widely used as an explanatory variable. Therefore, in this article we will test the extent to which R&D intensity in European countries may be explained by cultural dimensions. Our study included observations from 6,919 firm-year data from 1,517 firms in a sample of 13 European countries. The results support the idea that culture influences R&D intensity.