Why Do Some Firms Undertake R&D Whereas Others Do Not?

Data for the UK show Northern Ireland remains at the bottom of the productivity leaguetable, and that its R&D performance is consistently amongst the lowest across the UKregions. This paper analyses the data from a survey of some 250 matched firms operating inNorthern Ireland (approximately half undertaking R&D and half not), in order to provide amore detailed analysis of attitudes to undertaking R&D in the Province. We consider a rangeof factors that determine whether R&D takes place (such as absorptive capacity, marketorientation, business objectives, and competitive advantages). Conditional on whether R&Doccurs, the analysis then looks at, firstly, the determinants of the R&D capital stock andintensity; before concentrating on those firms who undertook no R&D and analysing whichfactors might make them likely to engage in such activities in the future. Policy conclusionsare then drawn as to what might be done to boost both the amount of R&D undertaken andthe number of firms engaged in R&D in the Province.