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*Controls for year and industry (two digit SIC code)
*Does not control for firm size, since it is correlated with R&D spending.
===Hitt 1991===
@article{hitt_effects_1991,
title = {Effects of {Acquisitions} on {R}\&{D} {Inputs} and {Outputs}},
volume = {34},
issn = {0001-4273},
url = {http://www.jstor.org/stable/256412},
doi = {10.2307/256412},
abstract = {Making acquisitions, although a popular strategy, may not always lead to positive firm performance. Researchers have offered several explanations for this relationship. One is that acquisitions lead to lower investments in R\&D and curtail the championing process whereby organization members internally promote new products and processes in firms. The current research found that acquisitions had negative effects on "R\&D intensity" and "patent intensity."},
number = {3},
urldate = {2016-06-17},
journal = {The Academy of Management Journal},
author = {Hitt, Michael A. and Hoskisson, Robert E. and Ireland, R. Duane and Harrison, Jeffrey S.},
year = {1991},
pages = {693--706},
file = {Hitt et al (1991) - Effects of Acquisitions on RD.pdf}
}
Hitt et al argue that acquisitions are substitutes for R&D/patents and other investments. We should keep this in mind when using these as regressors in the same equation.
