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Research and development (R&D) is important for new ventures as well as for established firms. The ability to generate new knowledge by R&D can serve as a key driver for firms with strong R&D needs. Strong R&D investment and subsequent findings can result in superior products or significant increases in production efficiency. However, R&D can be very resource-consuming and risk-bearing, and the availability of resources for firms located in developed as opposed to developing countries varies significantly. Therefore, firms' motivations to use these resources for R&D are based on their locations as well as their strategic motivations.

R&D Investment and Nations' Stages of Economic Development

Empirical literature has established the relationship between the R&D activity and economic development. Porter (1990) and Porter et al. (2002) identified that ...

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