The opportunity cost approach suggesting a countervailing cyclical effect between R&D and short-term investments is the subject of theoretical and empirical debate. We extend the discussion by investigating the impact of demand fluctuations and credit constraints on firms' R&D in ten new EU...

This paper contributes to the literature by investigating whether the cyclicality of R&D differs across countries with different levels of development. The paper uses micro-data from the World Bank/EBRD Business Environment and Enterprise Performance survey from 2001- 2007 and estimates...

The full implications of the global financial crisis of 2008-2009 are yet to be revealed. The crucial question is whether a crisis of such severe magnitude will set \"cleansing mechanisms\" into motion as suggested by the opportunity cost argument of R&D, or rather destroy the long-term...