Reviving demand-pull perspectives: The effect of demand uncertainty and stagnancy on R&D strategy

Abstract

This paper looks at the effects of demand uncertainty and stagnancy on firms' decisions to engage in R&D activities and the amount of financial effort devoted to these. The paper provides a number of contributions to the innovation literature: first, it adds to the revived debate on demand-pull perspectives in innovation studies by examining demand-related (lack of) incentives to invest in innovation. Second, it complements the literature on barriers to innovation by focusing on demand-related obstacles rather than the more frequently explored financial barriers. Third, it analyses whether experiencing demand barriers is a sector-specific feature. Firms active in high- or low-tech manufacturing or in knowledge-intensive or low-tech services might be more or less dependent on demand conditions when deciding to perform RΔ ...