Insights #13: Corporate R&D spending and the flaws of accounting profits: A tale of American exceptionalism, the Chinese dragon, and Japanese stagnation

R&D is an important engine of economic value creation. We find that North American firms accounted for 47% of the world’s corporate R&D spending in 2022, 2.5 times more than their Chinese and European counterparts. Chinese companies, however, now spend 8,000% more on R&D than they did in 2005, while American (+174%), European (+64%), and Japanese (+28%) firms show less growth. The IT, healthcare, and consumer discretionary sectors are the largest R&D spenders. The resilience of R&D spend during 2020 and 2021 varies markedly across sectors and geography.

29 Dec 2023 · Magaly Abboud, Sára Czégé, Camilla Erencin, Simon J. Evenett, Alexander Gruber, Adam Novak and Felix Reitz