R&D and Productivity: A Two Way Avenue?

Claudio Bravo-Ortega; Álvaro García Marín

doi:10.1016/j.worlddev.2010.11.006

R&D and Productivity: A Two Way Avenue?

Claudio Bravo-Ortega, Álvaro García Marín

Research output: Contribution to journal › Article › peer-review

79 Scopus citations

Abstract

Most of the empirical studies assessing the R&D-productivity relationship at the country level fail to consider the possible simultaneity of these variables. Using a 65-country panel for the period between 1965 and 2005, this paper studies the relationship between R&D and productivity using several R&D indicators. We establish that per capita R&D expenditure is strongly exogenous to productivity. This result allows us to develop a further argument that demonstrates the high social returns to R&D spending. Our estimates also indicate that a 10% increase in R&D per capita generates an average increase of about 1.6% in the long-run TFP.

Original language	English
Pages (from-to)	1090-1107
Number of pages	18
Journal	World Development
Volume	39
Issue number	7
DOIs	https://doi.org/10.1016/j.worlddev.2010.11.006
State	Published - Jul 2011
Externally published	Yes

Keywords

Country panel
Economic growth
Endogeneity
Innovation
Productivity

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.worlddev.2010.11.006

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@article{f0531ac08e324146a516a002b40272bb,

title = "R&D and Productivity: A Two Way Avenue?",

abstract = "Most of the empirical studies assessing the R&D-productivity relationship at the country level fail to consider the possible simultaneity of these variables. Using a 65-country panel for the period between 1965 and 2005, this paper studies the relationship between R&D and productivity using several R&D indicators. We establish that per capita R&D expenditure is strongly exogenous to productivity. This result allows us to develop a further argument that demonstrates the high social returns to R&D spending. Our estimates also indicate that a 10% increase in R&D per capita generates an average increase of about 1.6% in the long-run TFP.",

keywords = "Country panel, Economic growth, Endogeneity, Innovation, Productivity",

author = "Claudio Bravo-Ortega and {Garc{\'i}a Mar{\'i}n}, {\'A}lvaro",

note = "Funding Information: For valuable comments and suggestions, we thank Roberto {\'A}lvarez, Martin Bell, Jos{\'e} Miguel Benavente, Mauricio Calani, R{\'o}mulo Chumacero and Gustavo Leyva, as well as the participants at the internal Central Bank of Chile seminar and the SECHI 2007 meeting of economists. We are especially grateful to two anonymous referees whose comments greatly improved the final version of our paper, and to Daniel Lederman who generously shared his data with us. Claudio Bravo-Ortega thanks financial support from Fondecyt Grants Numbers 1061137 and 1085027. The usual disclaimer applies. ",

year = "2011",

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doi = "10.1016/j.worlddev.2010.11.006",

language = "English",

volume = "39",

pages = "1090--1107",

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T1 - R&D and Productivity

T2 - A Two Way Avenue?

AU - Bravo-Ortega, Claudio

AU - García Marín, Álvaro

N1 - Funding Information: For valuable comments and suggestions, we thank Roberto Álvarez, Martin Bell, José Miguel Benavente, Mauricio Calani, Rómulo Chumacero and Gustavo Leyva, as well as the participants at the internal Central Bank of Chile seminar and the SECHI 2007 meeting of economists. We are especially grateful to two anonymous referees whose comments greatly improved the final version of our paper, and to Daniel Lederman who generously shared his data with us. Claudio Bravo-Ortega thanks financial support from Fondecyt Grants Numbers 1061137 and 1085027. The usual disclaimer applies.

PY - 2011/7

Y1 - 2011/7

N2 - Most of the empirical studies assessing the R&D-productivity relationship at the country level fail to consider the possible simultaneity of these variables. Using a 65-country panel for the period between 1965 and 2005, this paper studies the relationship between R&D and productivity using several R&D indicators. We establish that per capita R&D expenditure is strongly exogenous to productivity. This result allows us to develop a further argument that demonstrates the high social returns to R&D spending. Our estimates also indicate that a 10% increase in R&D per capita generates an average increase of about 1.6% in the long-run TFP.

AB - Most of the empirical studies assessing the R&D-productivity relationship at the country level fail to consider the possible simultaneity of these variables. Using a 65-country panel for the period between 1965 and 2005, this paper studies the relationship between R&D and productivity using several R&D indicators. We establish that per capita R&D expenditure is strongly exogenous to productivity. This result allows us to develop a further argument that demonstrates the high social returns to R&D spending. Our estimates also indicate that a 10% increase in R&D per capita generates an average increase of about 1.6% in the long-run TFP.

KW - Country panel

KW - Economic growth

KW - Endogeneity

KW - Innovation

KW - Productivity

UR - http://www.scopus.com/inward/record.url?scp=79957959517&partnerID=8YFLogxK

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DO - 10.1016/j.worlddev.2010.11.006

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SN - 0305-750X

VL - 39

SP - 1090

EP - 1107

JO - World Development

JF - World Development

IS - 7

ER -

R&D and Productivity: A Two Way Avenue?

Abstract

Keywords

UN SDGs

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