Brzustowski, Thomas A.2012-05-312012-05-3120122012-05-31WP.12.01http://hdl.handle.net/10393/22878http://dx.doi.org/10.20381/ruor-2621Le texte intégral de ce document de travail n'est pas disponible en ligne. Pour plus de renseignements sur ce document, veuillez communiquer avec la Direction de la recherche de l'École de gestion Telfer à l'adresse recherche@telfer.uottawa.ca. // The full text of this working paper is not available online. For more information regarding this working paper, please contact the Telfer School of Management Research Office at research@telfer.uottawa.ca.This paper describes a theoretical study of firm-level R&D intensity that shows its important, but so far overlooked, connections with time in industrial innovation. It answers two questions that emerge from time-series data on Canadian industrial R&D spending: Why are big year-to-year fluctuations in R&D intensity associated with high mean values of R&D intensity? Why are small fluctuations associated with low values? It also answers a third question: What is the theoretical basis for the suggestion of Forgacs that the R&D intensity is inversely proportional to the market life of the product, and what are the limits on its applicability? The questions are answered with the help of a mathematical model of cash flows in R&D.