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BPEA Article

The Impact of Corporate Restructuring on Industrial Research and Development


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.


Ernst R. Berndt

Professor in Applied Economics Emeritus - MIT Sloan School of Management

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