Abstract:
This study investigates the dynamics of three strategic variables across three countries in the high-technology sector. The variables under
investigation are research and development (R&D) expenditure, capital expenditure (CPX), and sales and administrative (S&A) expenditure
and the three countries are the US, Japan, and the UK. We estimate the contemporaneous responsiveness of each of the three strategic
variables in response to changes in revenues across the three countries. We also test the statistical causality among the three variables as it
impacts revenues. Based on our analysis, we observe that the highest R&D intensity is among the US firms in comparison to firms from
Japan and UK. American firms maintain R&D intensity at a stable level with an elasticity of one. We find that Japanese firms have the
highest R&D elasticity. Japanese firms show the highest intensity in the area of CPX, whereas American firms have the highest elasticity. Our
results show a less globally integrated high-tech sector in each country.
