Library News

The IESE Library now has access to Research Quotient through Wharton Research Data Services (WRDS).

Research Quotient enables researchers to link R&D to firm growth and market value; derive optimal firm R&D spending; examine revenue generation from R&D and assess undervalued firms. Used for notable academic research on R&D, and developed by Anne Marie Knott, Professor of Strategy at Olin Business School, Washington University in St. Louis, RQ is key for R&D-related inquiries.

WHAT IS RQ?

Research Quotient = percentage increase in revenue from a 1% increase in R&D.
RQ is the output elasticity of R&D. RQ offers a universal, uniform, and reliable measure of a firm's R&D productivity.

WHY RQ?

• Link R&D spending to firm growth
• Link R&D spending to market value
• Derive a firm’s optimal R&D spending
• Predicts monthly returns

HIGHLIGHTS

Universe

• Estimated for all firms conducting R&D
• Only 50% of firms patent their R&D

Uniform

• Essentially, the ratio of inputs to outputs—interpretation is the same across all firms
• Compare firms across industries

Reliable

Firm behavior and economic outcomes consistent with endogenous growth theory (and validated over 47 years):
• Optimal R&D increases in RQ
• Market value increases in RQ
• Firm growth increases in RQ

COVERAGE from 1972-2010

How to access to Research Quotient?

Access campus-wide and off campus, from the Databases page. You need to obtain your WRDS account.