Identifying intertemporal relationships in corporate R&D expenditures

Estimates are empirically derived for the determinants of the research and development (R&D), dividend, investment, and financing decisions of 303 firms during the 1978-82 period. Composite variables are constructed to gain insights into the intertemporal relationships among the firms´ financial decision variables. Empirical estimates are provided for tradeoffs among decision variables and these relationships are incorporated into a model that sets R&D, dividend, financing, and investment policies in a manner that is consistent with stock price maximization.