Questionnaires were sent out to 124 large Swedish firms, asking how they determined budgets for research and development (R&D) and who decided about the size of these budgets. 94 firms answered and 69 of these undertook R&D.It was found that, as a rule, firms decide upon individual projects and do not specify in advance a fixed level for the R&D budget. The decision about individual R&D projects and/or the R&D budget was most frequently made by the president of the company.The implication of our results for various kinds of research on the economics of R&D are discussed.