, Volume 69, Issue 1, pp 57–67 | Cite as

A semi-parametric modeling of firms' R&D expenditures with zero values

  • Seung-Hoon Yoo
  • Hye-Seon Moon


Modeling firms' R&D expenditures often become complicated due to the zero values reported by a significant number of firms. The maximum likelihood (ML) estimation of the Tobit model, which is usually adopted in this case, however, is not robust to heteroscedastic and/or non-normal error structure. Thus, this paper attempts to apply symmetrically trimmed least squares estimation as a semi-parametric estimation of the Tobit model in order to model firms' R&D expenditures with zero values. The result of specification test indicates the semi-parametric estimation outperforms the parametric ML estimation significantly.


Tobit Model Lagrangian Multiplier Test Investment Ratio Expenditure Equation Sales Amount 
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Copyright information

© Springer-Verlag/Akadémiai Kiadó 2006

Authors and Affiliations

  • Seung-Hoon Yoo
    • 1
  • Hye-Seon Moon
    • 2
  1. 1.School of Business and Economics, Hoseo University
  2. 2.Korea Institute of Science and Technology Evaluation and Planning

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