Irreversibility of R&D investment and the adverse effect of uncertainty: Evidence from the OECD countries

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Inflation Uncertainty, Output Growth Uncertainty and Macroeconomic Performance (2006, background): “For example, according to Black (1987), investments in riskier technologies will be pursued only if the expected return 1Evidence of a negative impact of inflation uncertainty on a primarily irreversible investment like R&D is provided by Goel and Ram (2001).”
Environmental Policy Design Characteristics and Technological Innovation: Evidence from Patent Data (2010, background): “For instance, in a panel data study of nine OECD countries covering the period 1981–1992, Goel and Ram (2001) find a much sharper adverse effect of uncertainty on R&D investments than on non-R&D (and aggregate) investments.”
Patent Protection, Market Uncertainty, and R&D Investment (2006, background): “Goel and Ram (2001) examine a panel of OECD countries and measure uncertainty using the standard deviation of each country’s inflation rate. They find that uncertainty reduces the share of R&D in GDP. Minton and Schrand (1999) find that cash flow volatility is associated with lower levels of R&D inv”
Business R&D and the Interplay of R&D Subsidies and Product Market Uncertainty (2007, methodology): “Using annual data for nine OECD countries over the period 1982–1992, Goel and Ram (2001) relate the share of R&D and non-R&D investment in GDP to indicators of aggregate inflation uncertainty, real interest rates, and the growth of GDP.”