BPEA | 1990: Microeconomics

The Impact of Corporate Restructuring on Industrial Research and Development

Bronwyn H. Hall
Bronwyn Hall
Bronwyn H. Hall University of California, Berkeley
Ernst R. Berndt and
Ernst Berndt
Ernst R. Berndt Professor in Applied Economics Emeritus - MIT Sloan School of Management
Richard C. Levin

Microeconomics 1990

MANY CLAIM that the mergers, leveraged buyouts, and restructurings in the U.S. corporate sector during the 1980s had a detrimental effect on industrial spending for research and development. Critics of this recent activity point to the stagnation in real R&D expenditures by the private sector during the 1980s and suggest that these restructurings were a major cause of the decline. Others view this process as a healthy revitalization of U.S. industry in the face of foreign competition and a changing regulatory and financial environment.