Question: The variable rdintens is expenditures on research and development (R & D) as a percentage of sales. Sales are measured in millions of dollars. The

 The variable rdintens is expenditures on research and development (R &

The variable rdintens is expenditures on research and development (R & D) as a percentage of sales. Sales are measured in millions of dollars. The variable primary is profits as a percentage of sales. Using the data for 32 firms in the chemical industry, the following equation is estimated: r dentins = .472 (1.369) + .321 (.216) log (sales) + .050 (0.046) primary, n = 32, R^2 = .099. Interpret the coefficient on log (sales). In particular, if sates increase by 10%, what is the estimated percentage point change in rdintens? Is this an economically large effect? To test the hypothesis that R & D intensity does not change with sales against the alternative that it does increase with sales. Do the test at the 5% and 10% levels. Interpret the coefficient on primary. Is it economically large? Does primary have a statistically significant effect on rdintens

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