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Spillovers from publicly financed business R&D: Some empirical evidence from Germany
Abstract
This paper investigates the effects of interindustry R&D spillovers from publicly financed business R&D on private R&D efforts and productivity using data of West German manufacturing industries. The results suggest that it is important to distinguish between the effects of spillovers from privately and publicly financed business R&D. In particular, estimation results provide evidence of productivity-enhancing effects of spillovers from privately financed R&D while results are less clear-cut for publicly financed R&D. Moreover, there is some empirical evidence that private R&D efforts of higher-technology industries are stimulated by spillovers from privately financed R&D but not by spillovers from publicly financed R&D. However, public funding of R&D in higher-technology industries seems to induce private R&D investments within these industries.
... Consequently this builds capabilities within national innovation systems and among the scientific community. Publicly funded research can 'have an impact on increasing work with industry' (Bozeman and Gaughan 2007) less so than private industry funding and encourage private R&D investments particularly in higher technology industries (Bonte 2004) and on academic research (Joly and Mangematin 1996). ...
... Public funded research can 'have an impact on increasing work with industry.' (Bozeman and Gaughan 2007) less so than private industry funding and encourage private R&D investments particularly in higher technology industries (Bonte 2004). Moreover it can impact on economic growth through spin-off companies as Vincett (2010) suggests: 'that spin-off impacts represent incremental contributions to GDP, much larger than the government funding and directly attributable to it; government will also receive more in additional tax than they spent.' ...
National governments consistently implement an array of public sector entrepreneurship policies and activities, seeking to generate further economic activity and create new networks and market opportunities that reduce market risks and uncertainties for market-based technology exploiters. This means that scientists taking on the role of being a publicly funded principal investigator (PI) is at the nexus of science, government and industry, and can have a significant influence and impact on shaping and delivering outcomes of public sector entrepreneurship policies and activities. Within the emerging public sector entrepreneurship literature (see Leyden and Link 2015; Link and Link 2009), we argue that publicly funded PIs as key public sector entrepreneurship transformative agents, through scientific novelty and originality involving some creative and innovative processes that can be exploited for opportunities with good market or societal potential. Publicly funded PIs are key agents of what Leyden and Link (2015:14) define as public sector entrepreneurship:
... Our results depend on our specific modelling specifications and methodology, i.e., they are not model, specification and estimation methodology-invariant, but they are consistent with international evidence, e.g. Lichtenberg (1993) and Bönte (2004). 4 The paper is organised as follows. ...
... An additional approach is to regress R&D stocks or expenditures on indirect measures of total factor productivity. For example see, Bönte (2004), Engelbrecht (2002, 2003 ...
We use panel data for nine industries to evaluate research and development (R&D) investments in New Zealand over the past forty years. We estimate the impact of R&D stocks in a particular industry on output per person in that industry and on output per person in the rest of the economy. We examine both public and private R&D investments. Privately provided R&D has a statistically significant positive impact on own- industry output per person, suggesting it increases productivity. However, publicly provided R&D has no impact on own-industry output per person. There is also evidence that private R&D in certain industries positively affects output per person in the rest of the economy, i.e. it generates positive spillovers. There is no evidence of positive spillovers from publicly provided R&D.
... At present, regions have insufficient innovation power, have arduous tasks of ecological and environmental protection, and contradictions of unbalanced and insufficient development are increasingly emerging, which do not meet the requirements of high-quality development [6,7]. A rational and complete financial system helps promote physical capital accumulation and economic growth [8], and public R&D funds that support high-tech industries will also guide private R&D investment in such industries [9]. The government should encourage financial institutions to provide loan concessions for high-tech supply chains, such as carbon-emitting technologies, and promote clean energy technologies, which can have a positive impact on curbing carbon emissions [10]. ...
Combining technology with finance is the focus of supporting economic structure adjustment, and environmental benefits are also the proper meaning of the policy. Using the panel data of 274 cities in China from 2006 to 2017, this paper examines the impact of the Science and Technology Finance Policy (STFP) on carbon emission intensity in pilot cities and the transmission mechanisms through the difference-in-differences method and further explores the impact of STFP on the carbon emission intensity in neighboring cities. The results show that (1) STFP has significantly reduced carbon emission intensity in pilot cities and has dynamic effects, which gradually increase over time. There is significant heterogeneity in the carbon emission reduction effect of STFP, which produces stronger policy effects in first and second-tier cities and cities with higher information levels. (2) STFP achieves carbon emission reduction effects through three main pathways: the total factor productivity improvement effect, innovative elements agglomeration effect, and industrial structure optimization effect. (3) The STFP and national e-commerce demonstration policy have an interactive effect, and the two jointly contribute to the reduction in carbon emission intensity. From the perspective of a spatial effect, STFP has a radiation effect; that is, STFP not only reduces local carbon emission intensity but also curbs the carbon emission intensity in neighboring areas.
... The reason for market failure is due to certain characteristics associated with innovation that determine that private firms will not invest the socially desirable level since firms are unable to extract all the benefits from innovative activity. The existence of imperfections in the appropriability regimen in the protection of innovations and the difficulty in controlling the dissemination of knowledge created by innovative firms justify the presence of some government intervention (Bönte, 2004). On the other hand, access to external sources of funding is often difficult when the uncertainty and cost associated with an innovation project are high. ...
The purpose of this study is to analyze the characteristics of Spanish manufacturing firms that receive public funding from different levels of government. We have distinguished three level of government: regional government, central government and European Union, distinguishing in the latter case funding from the Structural Funds and the Framework Programmes of Research and Technological Development. The results show that each level of government has different priorities in the innovation and technological policy and funds firms with specific structural and innovation features. Public subsidies from regional governments and Structural Funds have similar priorities which are aimed mainly at promoting regional development. Central government’s innovation policy is targeted at large national firms following a strategy of creating “national champions”. Finally, the Framework Programme follows a strategy of “picking the winner”.
... Research activities of private companies are a key contributor to wealth creation in economies. A firm's R&D investment creates positive externalities (social benefits) and spill-over effects to the innovation system beyond the firm's boundaries, which are even larger than the private benefits (Coe and Helpman, 1995;Carlaw and Lipsey, 2002;Bonte, 2004). This fact results in under-provision of private R&D (market failure), which provides a rationale for public intervention to raise the R&D expenditure up to the socially optimal level. ...
Public sectors are under increasing pressure to provide better services and improve their efficiency in order to boost economic growth and social welfare. The promotion of R&D and innovation has proved to be a key determinant of economic performance of countries. However, little is known about the effect of publicly funded R&D activities on the performance and efficiency of public sectors. A better understanding behind such relationship is crucial, particularly in present times of public budget constraints. Accordingly, the article measures the public sector performance and efficiency of European countries by the construction of composite indicators. Moreover, it explores and tests the role of publicly funded R&D on public sector performance (using multivariate techniques and econometric analyses) and efficiency (by means of a non- parametric approach). Results indicate that publicly funded R&D should be considered a dimension of public sector performance, particularly when complementarities between private and public R&D emerge, but that it also plays a role on its efficiency.
... Thus, the absence of public intervention to compensate for this situation would lead to underinvestment in socially activities which are desirable to achieve technological progress (Martin and Scott, 2000;Hall, 2002;Bönte, 2004). ...
Innovation is a process that faces several market failure situations. For this reason and for being considered one of
the main drivers of economic growth, a large number of governmental and supranational policies are designed to foster technological
progress. Along with these policies, there is an increasing concern with their continuous evaluation aiming at providing
valuable feedback for these program’s adaptation and adequacy to the firm’s needs. The paper develops an evaluation of the
influence of innovation-focused programs in firm´s innovation and economic performance by means of a comparative analysis
of the results obtained by Spanish firms that have participated in R&D national programmes and those achieved by Spanish
firms participating in EUREKA international program. Findings show that the programmes were effective in achieving their objective
of promoting technological innovation but, as regards the economic effects, the results were less conclusive since some
differences were observed depending on the programme. The EUREKA companies displayed better behaviour, with positive
differences in their returns on assets and labour productivity. The results also confirm the importance of designing more detailed
and rigorous evaluation processes, taking into account the risk variable, in order to draw a more realistic picture of the impact of
national and international programmes
... La razón de este fallo de mercado se encuentra en ciertas características asociadas a la actividad innovadora que determinan que las empresas privadas no inviertan al nivel que sería socialmente deseable, al no ser capaces de extraer todos los beneficios derivados su inversión. La existencia de imperfecciones en los sistemas de apropiabilidad de los resultados de las innovaciones y la dificultad de controlar la difusión del conocimiento creado por las empresas innovadoras justificarían la presencia de cierta intervención pública (Bönte, 2004). Por otro lado, el acceso a fuentes externas de financiación suele ser difícil cuando la incertidumbre y el coste asociado a un proyecto de innovación son elevadas. ...
El objetivo de este estudio es analizar las características de las empresas manufactureras españolas que reciben financiación pública de diferentes niveles de gobierno. Hemos diferenciado tres niveles institucionales.: gobierno regional, gobierno central y Unión Europea, distinguiendo en este último caso, la financiación procedente de los Fondos Estructurales y de los Programas Marco de Investigación y Desarrollo Tecnológico. Los resultados muestran que las prioridades de la política de innovación y tecnológica de cada nivel de gobierno es diferentes y que, por tanto, financian a empresas con características estructurales y estrategias innovadoras específicas. Las prioridades políticas de los gobiernos regionales y los Fondos Estructurales guardan ciertas similitudes y están orientadas fundamentalmente a estimular el desarrollo regional. La política de innovación y tecnológica del gobierno central tiene como objetivo fundamental fortalecer a empresas nacionales grandes innovadoras siguiendo una política de "creación de campeones nacionales". Finalmente, el Programa Marco sigue una estrategia de "apostar al ganador".
... Since the seminal work of Arrow (1962), it is generally accepted that the market is unable to efficiently allocate the resources necessary for research and innovation activities because knowledge-related activities have characteristics commonly ascribed to public goods. Thus, the absence of public intervention to compensate for this situation would lead to underinvestment in socially activities which are desirable to achieve technological progress (Martin and Scott, 2000;Hall, 2002;Bönte, 2004). ...
el objeto de este artículo es contribuir al conocimiento del impacto que tienen en las empresas su participación en programas públicos de apoyo a la innovación tecnológica, introduciendo como importante novedad el análisis comparado de los resultados obtenidos por las empresas españolas que han participado en programas de ámbito nacional (proyectos empresariales de I+D gestionados por el Centro para el Desarrollo Tecnológico Industrial – proyectos CDTI) frente a las que lo han hecho en programas internacionales (programa EUREKA). Se entiende que conocer las ventajas y desventajas relativas de ambas experiencias puede ser de gran ayuda para la mejora del diseño y puesta en práctica de las distintas herramientas de intervención pública en la innovación.
... Since the seminal work of Arrow (1962), it is generally accepted that the market is unable to efficiently allocate the resources necessary for research and innovation activities because knowledge-related activities have characteristics commonly ascribed to public goods. Thus, the absence of public intervention to compensate for this situation would lead to underinvestment in socially activities which are desirable to achieve technological progress (Martin and Scott, 2000;Hall, 2002;Bönte, 2004). ...
Innovation is a process that faces several market failure situations. For this reason and for being considered one of the main drivers of economic growth, a large number of governmental and supranational policies are designed to foster technological progress. Along with these policies, there is an increasing concern with their continuous evaluation aiming at providing valuable feedback for these program’s adaptation and adequacy to the firm’s needs. The paper develops an evaluation of the influence of innovation-focused programs in firm´s innovation and economic performance by means of a comparative analysis of the results obtained by Spanish firms that have participated in R&D national programmes and those achieved by Spanish firms participating in EUREKA international program. Findings show that the programmes were effective in achieving their objective of promoting technological innovation but, as regards the economic effects, the results were less conclusive since some differences were observed depending on the programme in question. The EUREKA companies displayed better behaviour, with positive differences in their returns on assets and labour productivity. The results also confirm the importance of designing more detailed and rigorous evaluation processes in order to draw a more realistic picture of the impact of national and international programmes.
... Esta teoría considera que el mercado falla al proveer un nivel óptimo de I+D (Arrow, 1962). La existencia de imperfecciones en los sistemas de apropiabilidad de los resultados de las innovaciones y la dificultad de controlar la difusión del conocimiento creado justificarían la presencia de cierta intervención pública (Bönte, 2004). Una determinada inversión en innovación podría no llevarse a término por falta de recursos financieros, aunque la rentabilidad del proyecto fuera superior al coste de capital (Hall, 2002). ...
de los tipos de financiación para la I+D y el esfuerzo innovador: la evidencia empírica española Miriam Mate y José Molero Las distintas formas de financiación a la innovación son un potente instrumento de las políticas de innovación y tecnológica del Gobierno de España. El estudio de las características de las empresas que reciben ayudas a la I+D permite avanzar en el conocimiento de las prioridades que tiene que tener el Gobierno a la hora de hacer políticas de I+D. Por todo ello, el objetivo del trabajo es analizar los fondos que las empresas españo-las reciben para la I+D por medio de subvenciones y ayudas, con el fin de desvelar los rasgos característicos que tienen estas empresas y hasta qué punto una empresa depende de la financiación pública para subsistir. La muestra procede de la Encuesta sobre la Innovación Tecnológica de las empresas en el año 2005 (PITEC). Se realizó una fragmentación de la base de datos en cinco grupos dependiendo del tamaño de la empresa, demostrándose que esta variable influye significativamente en el tipo de actividades innovadoras de las empresas. Posteriormente, se establecieron distintos tipos de relaciones entre las variables asociadas con los recursos que emplean las empresas y las variables que tienen que ver con el tipo de financiación que utilizan las empresas. Se observó que las empresas más innovadoras son aquellas con un número menor de traba-jadores (micro y pequeñas), excepto en logística y apoyo. También se encontró en este grupo de empresas que existe una relación directa entre gastos totales en innovación, gastos internos en I+D y la procedencia de los fondos de I+D, que en los otros grupos de empresas no se observa. Palabras clave: PITEC, innovación tecnológica, financiación I+D, políticas de I+D. INTRODUCCIÓN Los indicadores del nivel de la I+D+i (investigación, desarrollo e innovación) españo-la, están a la cola de Europa. En los últimos años, se están desarrollando diferentes inicia-tivas para la mejora de estos indicadores, como el desarrollo de productos y servicios de mayor valor añadido, entre otros. 17133-C POLITICA-28 (F) 28/3/12 07:04 Página 107 Actualmente, España es uno de los países con mayor tasa de crecimiento del gasto en I+D debido al paulatino incremento de los fondos públicos destinados a la I+D+i. Sin embargo el sistema de ciencia-tecnología-empresa español es relativamente pequeño en relación con su posición económica en el contexto mundial, tanto en lo que respecta al por-centaje del PIB dedicado a I+D como al número de investigadores. Lo que parece claro es que la productividad es el factor clave para la convergencia real y la innovación es el motor de la productividad. Es cierto que el éxito del complejo de innovación depende del correcto funcionamien-to de un conjunto de actores, momentos y recursos, pero en muchos casos la adquisición de estos recursos demanda por parte de las empresas diferentes tipos de financiación. En España son pocos los estudios empíricos que analizan los factores que influyen en que las empresas reciban una determinada ayuda para la I+D. En la economía actual, es interesante estudiar hasta qué punto una empresa depende de los fondos públicos y qué impacto produce la concesión de estas ayudas en la actividad de las empresas. De aquí surge la necesidad de hacer una investigación tratando de ver la relación existente entre el esfuerzo innovador 1 de una empresa (medida como gasto en I+D) y las formas de finan-ciación de las que se nutre. Patrones de innovación de las empresas españolas fueron expuestos en los estudios realizados por Fonfría (1999). El argumento tradicional que justifica la intervención en materia de innovación está basa-do en la teoría de los fallos de mercado. Esta teoría considera que el mercado falla al proveer un nivel óptimo de I+D (Arrow, 1962). La existencia de imperfecciones en los sistemas de apropiabilidad de los resultados de las innovaciones y la dificultad de controlar la difusión del conocimiento creado justificarían la presencia de cierta intervención pública (Bönte, 2004). Una determinada inversión en innovación podría no llevarse a término por falta de recursos financieros, aunque la rentabilidad del proyecto fuera superior al coste de capital (Hall, 2002). Gran parte de los estudios que se ocupan de la relación entre la financiación pública y la actividad innovadora de las empresas se han centrado en analizar los efectos netos de las ayudas públicas sobre la I+D privada. Los resultados que se han obtenido son muy hetero-géneos y no resuelven el problema de la eficacia de estos instrumentos para incentivar la innovación de las empresas. El principal objetivo de estos trabajos ha consistido en evaluar si las ayudas públicas sustituyen o se adicionan a los gastos de I+D privados. Las ayudas públicas que han recibido mayor atención son las subvenciones (Almus. y Czarnitzki, 2003; Arvanitis et al., 2002; Guellec y Van Pottelsberghe, 1999; Guellec y Van Pottelsberghe, 2003; Duguet, 2004) y los incentivos fiscales a la I+D (Marra, 2004 y 2006; Hall, 1993, Hall y Van Reenen, 2000). Pese a la falta de consistencia de los resultados, lo que sí coinciden la mayoría de los académicos y políticos es que las ayudas son necesarias para fomentar la actividad innovadora de las empresas.
... Here, ECS k is the e-commerce stock of the 4-digit industry k in the 2-digit industry where firm i locates. 6 Rouvinen (2002) and Bonte (2004) also adopt this specification. 7 Actually, firm i can benefit from knowledge spillover differently from various firms, implying that the weight can be assumed as w ij . ...
This study investigates the impact of e-commerce and R&D on productivity, using a unique panel dataset obtained from Taiwanese manufacturing firms for the period from 1999 to 2002. We specifically consider the network externalities of e-commerce and employ the system generalized method of moment (GMM) technique to deal with the endogenous problem of e-commerce adoption. The empirical results show that both e-commerce and R&D capital have a positive influence on productivity, while R&D exhibits a larger productivity-enhancing effect. We also find a complementary relationship between e-commerce and R&D on enhancing productivity. Crucially, the inter-industry network externality of e-commerce significantly contributes to productivity.
... The first division is based on the argument that there is greater potential for R&D to increase TFP growth the further behind the technological frontier an industry is situated (Griffith et al. 2004). The second division is based on the findings that the returns to R&D differ between sectors (see e.g. Bönte 2004 Bönte , Hall et al. 2009). In the first case, an industry is classified in the group that is further away from (closer to) the frontier, 'large gap' ('small gap'), if the mean value of TGAP in this industry is above (below) the median over all industries. ...
This paper examines the productivity effects of privately and publicly funded R&D, both performed in the private sector. In doing so, it ascertains whether there are differences in the direct effects on an industry's total factor productivity growth, and whether the spillover effects of R&D performed in other industries within a country differ in terms of the two sources of funding. Using a panel of industries from 13 OECD countries, it is found that privately funded R&D has a positive productivity effect, but with diminishing returns. Publicly funded R&D shows signs of increasing returns to scale, but the total effect is negative for most industries in the sample. The results concerning spillover effects are less robust, but there is some evidence of positive spillover effects from privately funded R&D, whereas spillovers from publicly funded R&D have an insignificant or a negative effect on an industry's productivity growth.
... The terms (RSTRA) and (RSTER) are the intra and inter-industry R&D spillover respectively. Jaffe (1986), Rouvinen (2002), Chen and Lu (2003) and Bonte (2004) indicate that R&D spillover also plays an important role in firms' productivity. Bernstein (1988) has provided the following indicator ...
Using a newly constructed panel dataset on electronic commerce by Taiwanese manufacturing firms during 1999-2002, this paper explores the impact of electronic commerce adoption on total factor productivity with the consideration of network externalities. Besides the general specification of e-commerce adoption function, we consider the endogenous binary variable of e-commerce adoption by applying the treatment effects model. We also evaluate the difference of productivity improvement between firms that adopt and non-adopt e-commerce with the following split data: small and medium, and large; high-tech, and traditional firms. Empirical results show that: (1) the firms with larger size, higher network externalities of intra-industry, higher productivity and later timing are more likely to adopt e-commerce; (2) the adoption of e-commerce has influence on productivity improvement, particular for high-tech and larger firms.
... The rate of return literature calculates and compares ex post private rates of return and ex post social rates of return. This literature, summarized in Griliches (1979Griliches ( , 1992, Hall (1996) and Mansfield (1996), has found that social rates of return are often higher than private rates, and interprets this differential as a result of spillover (see, Bonte, 2004, for a recent example). These results appear to support the Pigovian analysis. ...
This paper explores the early discussion of external economies in the work of Alfred Marshall and Arthur Pigou. Marshall emphasized external economies as a positive aspect of the market process. Pigou's interpretation of externalities has become the standard public finance argument on the existence of market failure, and provides the rationale for proposed policy solutions. An examination of the differences between the two perspectives is subsequently used as the base for a discussion of the modern analysis of research and development, and of the difficulties inherent in the standard Pigovian view. A final substantive section of the paper reconsiders the Marshallian perspective, identifying recent contributions to economic theory that have begun a return to Marshall's original interpretation. The conclusion considers the significance of this Marshallian tradition for industrial policy.
... David el al. (2000) in a review of the literature argue that R&D expenditure asserts some positive impact on the underlying production procedure, though the evidence is ambivalent with respect to the exact magnitude. Also, in a recent paper, Bonte (2004) provides evidence that R&D is enhancing productivity growth in the case of the German industry, though it is the privately funded R&D that is mainly driving this impact, whilst the publicly funded R&D bears a less clear impact on productivity growth. However, earlier studies such as Lichtenberg (1988), Grilliches (1986) and Grilliches & Lichtenberg (1984) report little or no evidence of a productive R&D capital. ...
This paper follows the dual‐cost function methodology and develops a theoretical specification that assesses the contribution of public R&D capital to the productivity growth. The empirical application focuses on the Greek food and beverages industry. For this purpose it employs a micro‐aggregated annual data set over the period 1976–2002. The regression analysis shows that publicly‐funded R&D capital is a productive input as 8.7% and 7.3% of the total factor productivity growth in the food industry and in the beverages industry respectively is attributed to the publicly‐funded R&D capital. The relationship between publicly‐funded R&D and privately‐purchased inputs is also examined.
... Numerous other studies also point to the importance of geographical clusters and spillovers from publicly funded research (e.g. Saxenian, 1994; Storper, 1995 Storper, & 1997 Autio et al., 2004; Bonte, 2004; Coronado and Acosta, 2005; Goldstein and Drucker, 2006), although Audretsch and Stephan (1996) are less convinced about the specific importance of proximity. Proponents of 'new growth theory' see such spillovers as an important mechanism underlying growth patterns (e.g. ...
... For recent studies on the impact of public R&D expenditure on business R&D at country or sector level see, e.g., Guellec and van Pottelsberghe de la Potterie (2003) (17 OECD countries) andBönte (2004) (West German manufacturing industries); for studies measuring the impact of public R&D expenditure on economic performance at sector or country level, see, e.g.,Mamuneas (1999) (6 high-tech US manufacturing industries); Guellec and van Pottelsberghe de la Potterie (2001) (16 OECD countries); Sorensen et al. (2003) (Danish manufacturing industries); and Bönte (2003) (U.S. manufacturing industries). ...
This study investigates the impact of a wide spectrum of knowledge and technology transfer (KTT) activities (general information;
educational activities; research activities; activities related with technical infrastructure; and consulting) (a) on two
innovation indicators in the framework of an innovation equation with a endogenized variable of KTT activities as an additional
determinant of innovation; and (b) on labour productivity in the framework of a production function with endogenized innovation
variables and the variable for KTT activities as additional production factors.
Technological innovations in China's energy conservation and environmental protection industry (EEPI) are capital-intensive and useful to mitigate environmental externality, thus they need policy support and government subsidies (GSs) at the emerging stage. Nevertheless, research is limited on the influence of GSs onto innovation performance of China's EEPI, with particular to the effect of GSs from enterprise level. This study investigated 62 listed energy conservation and environmental protection enterprises (EEPEs) in China's market in 2013–2018. The innovation performance of these enterprises was quantitatively evaluated, and multivariate regression models were devised to examine GSs and other potential drivers that might influence the innovation. Key findings include (1) EEPEs' investment in R&D and protection of intellectual properties played a positive intermediary and regulatory role between GSs and enterprise innovation performance (correlation at the significance level of 0.05 (p = 0.045; p = 0.036)). (2) There is a significant positive correlation at the significance level of 0.05 (p = 0.011), which indicates that the strongest positive relation between GSs and innovation performance was identified in an environment of low external regulation and high internal regulation, and the effects were more significant for non-state-owned EEPEs(correlation at the significance level of 0.05 (p = 0.018)). (3) The promotion of GSs to innovation was found less effective in the three most developed regions in China, i.e., the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei Area. Nonetheless it was more effective for enterprise engaged in the circular economy and resource recycling (correlation at a significant level of 0.05 (P = 0.048)). These findings may shed lights on decision making of green technology development for environmental conservation and circular economy.
Bu tez içsel ekonomik büyüme yaklaşımının öngörülerini test etmek amacıyla, Türkiye ekonomisi için ampirik bir analiz sunmaktadır. İçsel büyüme ilişkin detaylı literatür verilmektedir. Neoklasik büyüme teorisinin aksine, içsel büyüme teorisi beşeri sermaye faktörünü büyüme fonksiyonları içine açıkça dahil etmiş ve büyüme sürecinde yayılmalar ve dışsallıkların olabileceğini modellerde dikkate almıştır. Ayrıca dış ticaret büyüme sürecinde önemli bir role sahiptir. 1963-2002 dönemi için eşbütünleşme ve nedensellik uygulamaları sonucunda, Türkiye’de yatırımlar ve beşeri sermaye açısından içsel büyüme yaklaşımını destekleyen sonuçlar elde edilmektedir. Bununla beraber ithalat ve ihracat yayılmalarının etkisi beklenildiği kadar önemli bulunmamaktadır. Yüksek AR-GE faaliyeti olan gelişmiş ülkelerden yapılan ithalat ve onlara gerçekleştirilen ihracat uzun dönemli ekonomik büyümeye çok fazla katkıda bulunmamaktadır. Bunda Türkiye’nin teknolojik geri kalmışlığı ve düşük beşeri sermaye düzeyinin etkisi bulunabilir. Bu nedenle Türkiye’de özel ve kamu sektörü düzeyinde daha fazla AR-GE faaliyetinin yapılması ve bunların koordine edilmesi gereği dile getirilmektedir. Bir başka ifadeyle, Türkiye’nin politikası ulusal yenilik sistemi çerçevesinde, hem teknoloji yoğun malların ticaretini teşvik etmek hem de yerli firmaların AR-GE faaliyetlerine destek olmayı gerektirmektedir.
ABSTRACT
This thesis provides an empirical analysis of endogenous economic growth testing its implications for Turkey. Detailed literature of endogenous growth theory and empirical analysis is presented. Contrary to neoclassic theory, endogenous growth theory have attempted to model growth process both by introducing human capital explicitly into production functions and by allowing for the possibility of externalities and spillovers. Foreign trade is also an important role for this mechanisms. An application of cointegration an causality analysis for the period of 1963-2002 demonstrated that the results presented this analysis lead to support for endogenous growth models with spillovers in terms of human capital and fixed investments in Turkey. However, the evidence of export and import spillovers is not so crucial. Import from developed and high R&D performing countries and export to them does not contribute to long-run economic growth as much as we expected. Technological backwardness of Turkey and low level of human capital may lead to this results. For this reason it is discussed that Turkey must performed more R&D in both private and public level coordinating all efforts. The policy package for Turkey may be essential to contain both promotion of trade of more technological goods and assistance to R&D activities of the local firms in the frame of national innovation system.
The return to R&D investment and activities has been the object of a vast literature, both from a theoretical and empirical perspective. The aim of this overview is to present a selection of contributions to underscore the main shared findings and highlight open issues, while also providing a preliminary analysis of the returns to R&D investment in large research infrastructures (RIs) in Europe. First, a common methodological framework is distilled from the macro-literature, examining the return to R&D in aggregate terms. Then, the evaluation in the context of specific projects, mainly in large RIs, is examined, followed by the explicit consideration of externalities and spillover effects of research activities. A novel empirical analysis of European RIs is also presented, based on a novel data set, to highlight trends and suggest new avenues for the evaluation of the rate of return to investments in research infrastructures, using both a cost effectiveness ratio and a bibliometric citation count as metrics to evaluate the return to R&D investment in these facilities. Directions for future research are sketched in the concluding section.
This paper explores how different public administrations (regional, national, European and Framework Program) allocate public resources to promote innovation among innovative companies in the Spanish manufacturing industry. We incorporate variables that have never been treated in this line of research before, such as exportoriented and Pavitt's taxonomy among others. In order to know the preferences of each public program aimed at promoting innovation we use two econometric estimation techniques: First, a binary logistic regression and, second, another binary logistic regression corrected for selection bias derived from the lack of consideration of certain relevant characteristics of manufacturing firms that do not innovate. We check if the importance and statistical significance of certain explanatory variables depend on the estimation method used. We found that the four public administrations preferably assign public resources to Spanish companies that cooperate with other domestic companies. We also found that European programs (EU and Framework Program) show their allocation preferences towards innovative firms that export outside EU. The public aid from the Spanish central administration seeks to promote the creation of large 'national champions'.
This paper aims to unearth the factors that influence scientists in becoming and choosing to become publicly funded principal investigators (PIs). PIs are the linchpins of knowledge transformation and bridging triple helix actors, particularly academia- industry. At a micro level, PIs are at the nexus of engaging and interacting with other triple helix actors. No study to date has specifically focused on the factors that influence scientists to become or choose to become publicly funded PIs. For scientists taking on the role of a PI represents an important landmark in their research career. Set in an Irish research system we found two main categories of influencing factors - push and pull. Pull factors are where the PI has more choice in choosing to become a PI, where as push factors is where the PI has less choice in choosing to become a PI. Pull factors we identified were control, career ambition and advancement, personal drive and ambition. Pull factors we identified were project dependencies and institutional pressures.
Existing studies on performance analysis of R&D funding have focused only on the object of measurement, and have not considered potential relations among various influential factors. In this paper, we developed performance indices to investigate further at individual company level. Empirical analysis was performed using the performance survey data for the science and technology promotion fund in Korea. The results of performance analysis could be used to provide the individual companies with insightful feedback information for improving their productivity. We hope this study contribute to better management of national R&D funding.
This paper examines the effect of knowledge spillovers on regional industries' knowledge output. The function of knowledge is proposed and applied to a panel dataset of five industries in 30 provincial units from 1996 to 2005. The estimates show that interindustry knowledge in own region as well as intra and interindustry knowledge in other regions play significantly positive impact on regional industries' knowledge output. The sales of new products (NP) increased by 0.13%, other industries' R & D increased by 1% in this region; The number of patent application as dependent variable, inter-industry and intra-industry knowledge spillovers in other regions promote this industry' knowledge output, whose elasticity is 0.44 and 0.17 respectively. Interindustry knowledge spillover and own R&D effects complement each other in promoting productivity.
This paper examines the interindustry and intraindustry knowledge spillover effects of multinational enterprise (MNE) A model on interindustry and intraindustry knowledge spillover equation is proposed based on the model of Mankiw(1992) and applied to a panel dataset of 15 high-tech industryies from 1997 to 2006.The estimates show that there exists significant interindustry and intraindustry knowledge spillover effects of MNE, intraindustry knowledge spillover of MNE and productivity is highly positive correlated, the estimated coefficient is 0.15,with the 1% rising of interindustry knowledge capital of MNE, the productivity goes up 0.17%,but interindustry knowledge capital of domestic industries hampers the growth of productivity; there exists complementary effects between intraindustry knowledge spillover of MNE and company R&D investment, so does interindustry knowledge capital of domestic industries.
In this study, we aimed to analyze research and development (R&D) business strategy with regard to investment funded by the government or by the business itself in relation to market performance. Because these 2 types of subsidized and nonsubsidized R&D may have important implications for market performance, it is worth considering their differences. In this paper empirical evidence is provided of the relationships among government-funded R&D, private enterprise-funded R&D, and market performance in innovation projects. Regression analysis was used to test the hypotheses using a sample of 500 projects. The results indicate that market performance of businesses that fund their own R&D is statistically and significantly greater than that of high investment by government in R&D. Finally, managerial implications and possible future research directions are discussed.
An important issue in R&D policy is whether publicly funded R&D is a substitute or a complement to privately funded R&D. However, measuring the impact of R&D policies has proven a difficult task, complicated by simultaneity and selection bias. We utilize an approach to examine the effect of public funding that takes account of both these potential biases, using R&D data for Danish firms from 1998 to 2005. This data allows more complete quantitative estimates of funding impacts than earlier studies. We find robust evidence of significant complementary effects, with a 1% increase in public funding yielding 0.08-0.11% increase in private R&D.
This study investigates the impacts of a palette of Knowledge and Technology Transfer (KTT) activities (general information, educational and research activities, activities related with technical infrastructure, and consulting) (a) on several innovation indicators (a1) in the framework of an innovation equation with variables of endogenized KTT activities (overall activities, specific forms of activities) as additional determinants of innovation, and (a2) based on a matched-pairs analysis for several forms of KTT activities; (b) on labour productivity in the framework of a production function with endogenized KTT activities as an additional production factor. The data used in the study were collected by means of a survey of Swiss enterprises that took place at the beginning of 2005. We found that KTT activities improve the innovation performance of firms both in terms of R&D intensity and sales of innovative products. The positive effect of overall KTT activities can be traced back mainly to research and educational activities. This could be shown by several methods: the innovation equation approach with endogenized KTT variable as well as three matching methods. Further, KTT activities seem to exercise a positive influence on labour productivity both through a direct effect as well as through an indirect effect by raising the elasticity of R&D intensity with respect to labour productivity.
This study investigates the impact of a wide spectrum of Knowledge and Technology Transfer (KTT) activities (educational and
research activities, activities related with technical infrastructure, and consulting) on two innovation indicators (a) in
the framework of an innovation equation with variables for specific forms of KTT activities as additional determinants of
innovation, and (b) based on a matched-pairs analysis for several specific forms of KTT activities. The data used in the study
were collected by means of a survey of Swiss enterprises that took place at the beginning of 2005. We found that research
and educational activities improve the innovation performance of firms in terms of sales of considerably modified products,
research activities in addition also in terms of sales of new products. This could be shown by several methods: the innovation
equation approach with instrument variables for specific forms of KTT activities as well as two matching methods.
Survey-based choice scenarios used to value non-market public goods typically preclude any risk that the benefits described may not be delivered. Our survey specifies explicit risks of (a) outright program failure and (b) program redundancy due to possible private sector substitutes. Additionally, most analyses assume that survey subjects fully accept these scenarios and that all provided information receives their complete attention. Our discounted expected utility model of choice accommodates both these objective risks and the possibility of subjective scenario adjustment or selective inattention by respondents. We then counterfactually simulate willingness-to-pay in the absence of these distortions. Copyright Springer Science+Business Media, LLC 2007
In this chapter we study the asymptotic distributions for ordinary least squares (OLS), fully modified OLS (FMOLS), and dynamic OLS (DOLS) estimators in cointegrated regression models in panel data. We show that the OLS: FMOLS, and DOLS estimators are all asymptotically normally distributed. However; the asymptotic distribution of the OLS estimator is shown to have a non-zero mean. Monte Carlo results illustrate the sampling behavior of the proposed estimators and show that (I) the OLS estimator has a non-negligible bias in finite samples, (2) the FMOLS estimator does not improve over the OLS estimator in general, and (3) the DOLS outperforms both the OLS and FMOLS estimators.
This paper uses a new firm panel data set to explore the relationship between R&D and productivity in German manufacturing firms for the period from 1979 to 1989. The results confirm the view that R&D is an important determinant of productivity growth. In the cross-section, the elasticity of sales with respect to R&D capital is on the order of 14 per cent. Using fixed-effects estimators yields R&D elasticities of about 8 per cent. Differencing estimates improve considerably when growth rates are computed over longer time periods, suggesting that the divergence between time-series and cross-sectional estimates is driven by measurement errors. The paper also considers differences between high-technology and other firms. Cross-section and panel elasticity estimates of the R&D effect diverge considerably for the two groups, while the corresponding rate of return estimators display far less variation. There is some evidence that the R&D elasticity increased during the early 80s, and that it fell sharply back to its 1979 value during the period from 1985 to 1989.
This paper attempts to quantify the aggregate net effect of government funding on business R&D in 17 OECD Member countries over the past two decades. Grants, procurement, tax incentives and direct performance of research (in public laboratories or universities) are the major policy tools in the field. The major results of the study are the following: Direct government funding of R&D performed by firms has a positive effect on business financed R&D (except if the funding is targeted towards defence activities). Tax incentives have an immediate and positive effect on business-financed R&D; Direct funding as well as tax incentives are more effective when they are stable over time: firms do not invest in additional R&D if they are uncertain of the durability of the government support; Direct government funding and R&D tax incentives are substitutes: increased intensity of one reduces the effect of the other on business R&D; The stimulating effect of government funding varies with respect to its generosity: it increases up to a certain threshold (about 10% of business R&D) and then decreases beyond; Defence research performed in public laboratories and universities crowds out private R&D; Civilian public research is neutral for business R&D. * We thank the participants to various seminars, including the OECD Committee for Scientific and Technology Policy and the NBER 2000 Summer Institute on Productivity for helpful comments and suggestions. All opinions expressed in this article are those of the authors and do not reflect necessarily the views of the OECD or Universite Libre de Bruxelles.
Several studies have already addressed the question whether R&D subsidies lead to additionality effects or crowd out firms’ private investment. This paper provides insights into the impact of R&D grants on private R&D expenditure, distinguishing between research and development activities. We employ parametric treatment effects models and IV regression methods. The hypothesis that firms respond differently to R&D subsidies depending on the nature of the R&D activity is confirmed. R&D subsidies are found to mainly contribute to an increase in development expenditure. By contrast, crowding out effects for the research part cannot be rejected.
In this paper, we apply the asymptotic theory of panel cointegration developed by Kao and Chiang (1997) to Coe and Helpman's (1995) international R&D spillovers regression. The OLS with bias-correction, the fully-modified (FM) and the dynamic OLS (DOLS) estimations produce different predictions about the impact of foreign R&D on total factor productivity (TFP) although all the estimations support the result that domestic R&D is related to TFP.
This paper attempts to quantify the aggregate net effect of government funding on business R&D in 17 OECD Member countries over the past two decades. Grants, procurement, tax incentives and direct performance of research (in public laboratories or universities) are the major policy tools in the field. The major results of the study are the following: Direct government funding of R&D performed by firms has a positive effect on business financed R&D (except if the funding is targeted towards defence activities). Tax incentives have an immediate and positive effect on business-financed R&D; Direct funding as well as tax incentives are more effective when they are stable over time: firms do not invest in additional R&D if they are uncertain of the durability of the government support; Direct government funding and R&D tax incentives are substitutes: increased intensity of one reduces the effect of the other on business R&D; The stimulating effect of government funding varies with respect to its generosity: it increases up to a certain threshold (about 10 % of business R&D) and then decreases beyond; Defence research performed in public laboratories and universities crowds out private R&D; Civilian public research is neutral for business R&D.
Coe and Helpman(1995) have measured the extent to which technology spills over between industrialized countries through the particular channel of trade flows. This paper re-examines two particular features of their study. First, we suggest that their functional form of how foreign R&D affects domestic productivity via imports is probably incorrect. We provide an alternative model which turns out to be more accurate, both theoretically and empirically. Second, we take into account two new potential channels of technology transfer: inward FDI and technology sourcing, as proxied by outward FDI. The empirical results show that outward FDI flows and imports flows are two simultaneous channels through which technology is internationally diffused. Inward FDI flows are not a significant channel of technology transfer. The hypothesis of technology sourcing associated with MNEs activities abroad is therefore confirmed while the widespread belief that inward FDI is a major channel of technology transfer is rejected.
The relationship between productivity growth and R & D intensity is reexamined using detailed data for 193 U.S. manufacturing industries and a breakdown of R & D into own product and process improvement oriented components and "imported" R & D from other industries. A significant interindustry relationship between total factor productivity growth and R & D intensity is reconfirmed, with "used" R & D having larger coefficients than own product R & D components. But "own" product R & D is also significant and the explanatory power of the "used" R & D variable derives largely from the own-process R & D component rather than the embodied component imported from other industries. Thus, the evidence for R & D spillovers remains tenuous.
The authors assume that firms invest in R&D not only to generate innovations, but also to learn from competitors and extraindustry knowledge sources (e.g., university and government labs). This argument suggests that the ease of learning within an industry will both affect R&D spending, and condition the influence of appropriability and technological opportunity conditions on R&D. For example, they show that, contrary to the traditional result, intraindustry spillovers may encourage equilibrium industry R&D investment. Regression results confirm that the impact of appropriability and technological opportunity conditions on R&D is influenced by the ease and character of learning. Copyright 1989 by Royal Economic Society.
Is there too much or too little research and development (R&D)? In this paper we bridge the gap between the recent growth literature and the empirical productivity literature. We derive in a growth model the relationship between the social rate of return to R&D and the coefficient estimates of the empirical literature and show that these estimates represent a lower bound. Furthermore, our analytic framework provides a direct mapping from the rate of return to the degree of underinvestment in research. Conservative estimates suggest that optimal R&D investment is at least two to four times actual investment.
Zusammenfassung
Interindustrielle F&E-Spillover senken die Produktionskosten derjenigen industriellen Sektoren, welche diese Spillover nutzen können. Zur Quantifizierung der Spillover-Effekte werden für fünf technologieintensive Sektoren des Produzierenden Gewerbes in Deutschland die sektoralen variablen Stückkostenfunktionen und die abgeleiteten Kostenanteilsgleichungen der Produktionsfaktoren geschätzt. Drei der untersuchten Sektoren generieren F&E-Spillover und sind auch die Empfänger dieser Spillover. Die aus den Schätzergebnissen berechneten privaten und sozialen marginalen Erträge des sektoralen F&E-Kapitals weisen bezüglich ihrer Höhe große Unterschiede auf. Schätzungen mit verschiedenen Abschreibungsraten des F&E-Kapitals zeigen, daß die Ergebnisse sensitiv auf eine Variation der Abschreibungsraten reagieren.
This paper reviews the recent empirical literature on international knowledge spillovers. I start by summarizing the theoretical models that have highlighted the potential importance of these spillovers. Then, drawing upon the older micro productivity research tradition, I lay out a simple conceptual framework (though not a formal theoretical framework) for thinking about the various kinds of knowledge transfers that may exist, how they might be mediated, and the means by which their effects might be traced empirically. I then review some influential empirical papers, demonstrating that empirical work to date may very well not have identified the effects the authors set out to measure. Finally, I describe some promising new approaches which may allow researchers in this field to identify more precisely, both conceptually and empirically, certain kinds of international knowledge spillovers.
Government policies like the Advanced Technology Program (“ATP”) are intended, at least in part, to remedy the “market failure”
inherent in the fact that a significant portion of the social benefits of new knowledge and technology are not captured by
a firm that invests in R&D. ATP’s project selection, and its evaluation of the impact of its program, can be made more effective
by explicitly incorporating the analysis of such “spillovers.” For project selection, this means identifying technological,
organizational and economic factors that tend to oint to a large “spillover gap,” or deviation between the social and private
rates of return to a proposed project. For program evaluation and assessment, it means adapting existing study methods that
measure social returns to innovation in ways that explicitly capture spillover effects.
A model is presented based on recent theories of economic growth that treat commercially oriented innovation efforts as a major engine of technological progress. We study the extent to which a country's total factor productivity depends not only on domestic R&D capital but also on foreign R&D capital. Our estimates indicate that foreign R&D has beneficial effects on domestic productivity, and that these are stronger the more open an economy is to foreign trade. Moreover, the estimated rates of return on R&D are very high, both in terms of domestic output and international spillovers.
This paper estimates and evaluates the contribution of R&D tax incentives and publicly financed R&D investment policies in promoting the growth of output and privately funded R&D investment in US manufacturing industries. Publicly financed R&D induced cost savings but crowds out privately financed R&D investment, while the incremental R&D tax credit and immediate deductibility provision of R&D expenditures have a significant impact on privately financed R&D investment. The optimal mix of both instruments is an important element for sustaining a balanced growth in output and productivity in the manufacturing sector.
Is public R&D spending complementary and thus “additional” to private R&D spending, or does it substitute for and tend to “crowd out” private R&D? Conflicting answers are given to this question. We survey the body of available econometric evidence accumulated over the past 35 years. A framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross-section data from various levels of aggregation (laboratory, firm, industry, country). The findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the “experiment(s)” that the investigators envisage is not adequately specified. We conclude by offering suggestions for improving future empirical research on this issue.
We demonstrate that panel unit root tests can have high power when a small fraction of the series is stationary and may lack power when a large fraction is stationary. The acceptance or rejection of the null is thus not sufficient evidence to conclude that all series have a unit root or that all are stationary.
A number of market failures have been associated with R&D investments and significant amounts of public money have been spent on programs to stimulate innovative activities. In this paper, we review some recent microeconometric studies evaluating effects of government-sponsored commercial R&D. We pay particular attention to the conceptual problems involved. Neither the firms receiving support, nor those not applying, constitute random samples. Furthermore, those not receiving support may be affected by the programs due to spillover effects which often are the main justification for R&D subsidies. Constructing a valid control group under these circumstances is challenging, and we relate our discussion to recent advances in econometric methods for evaluation studies based on non-experimental data. We also discuss some analytical questions, beyond these estimation problems, that need to be addressed in order to assess whether R&D support schemes can be justified. For instance, what are the implications of firms' R&D investments being complementary to each other, and to what extent are potential R&D spillovers internalized in the market?
Using a newly available dataset on the R&D investment of individual French manufacturing firms for the 1980s, we replicate and update a series of studies on French R&D and productivity at the firm level from the 1970s, and evaluate the robustness of methods currently used to measure the private returns to R&D. Our main findings are: Having a longer history of R&D expenditures helps improve the quality of the R&D elasticity estimates, but the choice of depreciation rate for R&D capital makes little difference. The correction for double-counting of R&D expenditures in capital and labor is important and may be interpreted under certain conditions as converting a measured ‘excess’ rate of return to a total rate of return to R&D. We show that the direct production function approach to measure returns to R&D capital is preferred on several grounds over the rate of return variation used in the past. Finally, as in the 1970s, the productivity of R&D capital for French manufacturing firms in the 1980s is positive; how strong and robust depends on whether we control for potential industry and firm effects.
Technology spillovers are an important source of economic growth. This article presents a new method to measure technology spillovers at the macroeconomic or sectoral level by means of a so-called technology flow matrix. The main novelty relative to existing technology flow matrices is that the matrix in this article provides insight into the time dimension of the spillover process. The matrix is used to assess whether or not R&D spillovers lead to a more equal distribution of technology investment over sectors.
Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is not a conventional good or a public good; it is a nonrival, partially excludable good. Because of the noconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that a large population is not sufficient to generate growth. Copyright 1990 by University of Chicago Press.
The effect of R$50D on productivity growth in Japanese manufacturing industries is examined. Using more accurate firm R$50D expenditure data than widely used data based on financial statements, series of R$50D capital are constructed. Then, rate of return on R$50D investment is estimated. In addition, the impact of other industries' R$50D on the productivity growth of an industry is also estimated. An attempt is made to determine the effect of electronics technology upon the productivity growth of other industries through the transaction of the intermediate electronics goods with improved quality, and through the diffusion of the new technological knowledge discovered. Japanese Technology Trade 1977-1981 Copyright 1989 by MIT Press.
This article focuses on the effects of double-counting and expensing on the measured returns to R&D. The contribution of research and development (R&D) to economic growth has been measured in two general ways. The first is to compute total factor productivity in a growth accounting framework and to attribute this "residual" growth to R&D. The prevailing view is that, in the presence of double-counting, the measured contribution of R&D represents the return above and beyond the normal remuneration to traditional capital. Author demonstrate that this excess returns interpretation (ERI) is essentially correct in the growth accounting framework and that the resulting bias in the measured contribution of R&D to growth is large. In postwar U.S. manufacturing the measured residual is biased downward by as much as 30%. The expensing bias is downward and reinforces the excess returns bias in this case, and the total bias is large. In both the growth accounting and econometric contexts, the magnitude of the biases may vary across samples and over time. There is simply no substitute for properly measured variables.
This paper presents several new methods for measuring intersectoral knowledge spillovers, and applies these methods in an analysis of productivity growth in manufacturing for a cross-country, cross-sectional sample for the 1980s. It is argued that existing methods of measuring such intersectoral knowledge spillovers are mostly aimed at measuring so-called crent spillovers'. The methods developed here are aimed at measuring knowledge spillovers—an additional aspect of the spillover process. The empirical analysis shows that there are indeed differences between these two types of spillover measure.
In this paper, we measure the effect of internal R&D and various spillover concepts on productivity growth, using a database for France that covers the period 1978-92. Three spillover concepts are distinguished: rent spillovers related to investment goods; rent spillovers related to intermediate goods; pure knowledge spillovers. When production is measured by gross output, all three spillover concepts yield positive and statistically significant coefficients. Each concept has a measurable effect on technological progress at the sectoral level.
Equations are presented that relate countries' total factor productivity to own and to foreign R&D efforts. They are estimated on a panel of annual time series concerning a set of industrial countries over a period from the mid-1960s to the early 1990s. Use is made of alternative cointegrating estimation procedures. The results imply that, whereas domestic R&D efforts exercise a significant influence on total factor productivity, the influence of international technology spillovers is, on average, even more important. A causality analysis confirms that the causation runs in essence from R&D to productivity rather than the other way around.
This paper investigates empirically the importance of technological catch-up in explaining productivity growth in a sample of countries since the 1960s. New proxies for a country's absorptive capability--based on data for students studying abroad, telecommunications and publications--are tested in regression models. The results indicate that absorptive capability is a factor in explaining growth, with the most robust finding that countries with relatively high numbers of students studying science or engineering abroad experience faster subsequent growth. However, the paper also indicates that the significance of coefficients varies across specifications and samples, suggesting caution in focusing on individual results. Copyright 2004, Oxford University Press.
This paper deals with the estimation of the impact of technology spillovers on productivity at the firm level. Panel data for American manufacturing firms on sales, physical capital inputs, employment and R&D investments are linked to R&D data by industry. The latter data are used to construct four different sets of `indirect' R&D stocks, representing technology obtained through spillovers. The differences between two distinct kinds of spillovers are stressed. Cointegration analysis is introduced into production function estimation. Spillovers are found to have significant positive effects on productivity, although their magnitudes differ between high-tech, medium-tech and low-tech firms.
This paper studies the effect of R&D spillovers on R&D spending and productivity in a sample of German manufacturing firms. Using panel estimation techniques, the results suggest that spillovers affect industries in a heterogeneous manner. In terms of R&D investment, firms in high-technology sectors appear to react positively and more strongly to spillovers than firms in other industries. Experiments with alternative spillover definitions suggest that the effect is not due to racing phenomena. Moreover, in high-technology industries spillovers have a productivity-enhancing effect in addition to encouraging R&D investment. The effect is conditioned by the firm’s own R&D activity. Consistent with the hypothesis of absorptive capacity, high R&D capital stocks appear to enable firms to profit from external R&D.
In this paper, we study the asymptotic distributions for least-squares (OLS), fully modified (FM), and dynamic OLS\ (DOLS) estimators in cointegrated regression models in panel data. We show that the OLS, FM, and DOLS estimators are all asymptotically normally distributed. However, the asymptotic distribution of the OLS estimator is shown to have a non-zero mean. Monte Carlo results examine the sampling behavior of the proposed estimators and show that (1) the OLS estimator has a non-negligible bias in finite samples, (2) the FM estimator does not improve over the OLS estimator in general, and (3) the DOLS out-performs both the OLS and FM estimators.
Traditional growth theory emphasizes the incentives for capital accumulation rather than technological progress. Innovation is treated as an exogenous process or a by-product of investment in machinery and equipment. Grossman and Helpman develop a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.
The direct successes of space, defense, and health research are not reflected in the national productivity accounts. Nor are
many of the improvements in technologically complex new products. Econometric studies underestimate, therefore, the full contribution
of R&D, especially since it is difficult to trace its spillover effects. Nevertheless, a recent study finds a significant
contribution of R&D to productivity growth in the largest U.S. manufacturing corporations, with no evidence of a major decline
in it, and a larger role for basic research and a smaller one for federally financed R&D expenditures than is implied by their
relative importance in total R&D expenditures.
This paper uses confidential Census longitudinal microdata to examine the association between R&D and productivity for the period 1972-85. These data allow for significant improvements in measurement and model specification, yielding more precise estimates of the returns to R&D. The authors' results confirm the findings of existing studies: (1) positive returns to R&D investment; (2) higher returns to company-financed research; and (3) a productivity "premium" on basic research. These results are robust to adjustments for "influential outliers." Also, the authors' evidence suggests that the return to company-financed R&D is an increasing function of firm size. Copyright 1991 by Oxford University Press.
When companies decide to engage in technology transfer through exclusive licensing to other firms, they have two basic options: to use standard licensing contracts or to set-up more elaborate partnership-embedded licensing agreements. We find that broader partnership-embedded licensing agreements are preferred with higher levels of technological sophistication of industries, with greater perceived effectiveness of secrecy as a means of appropriability, and when licensors are smaller than their licensees. Innovative differential between companies, innovative supremacy of the licensor and market and technological overlap between partners appear to have no effect on the preference for a particular form of licensing. Copyright 2009 , Oxford University Press.
In this paper, we apply the asymptotic theory of panel cointegration developed by Kao and Chiang (1998) to Coe and Helpman's (1995) international R&D spillovers regression. The OLS with bias-correction, the fully-modified (FM) and the dynamic OLS (DOLS) estimations produce different predictions about the impact of foreign R&D on total factor productivity (TFP) although all the estimations support the result that domestic R&D is related to TFP. Copyright 1999 by Blackwell Publishing Ltd
A new data set for approximately 1,000 largest manufacturing firms inthe United States during 1957-77 is analyzed using a standard production function framework augmented by the addition of R&D "capital" and "mix" variables. The results indicate that R&D continued to contribute to productivity growth with no significant decline in its effectiveness in the 1970s as compared to the 1960s; that the contribution of basic research was significantly higher than its nominal ratio would imply; and that federally financed R&D expenditures had a positive but smaller effect on the productivity growth of these firms than the comparable contribution of privately financed R&D expenditures. Copyright 1986 by American Economic Association.
This paper employs a dynamic production model to examine the short-run effects of publicly financed R&D capital on the cost structure of six high-tech US manufacturing industries. The results show that, given an industry's output, publicly financed R&D capital reduces the variable production cost in all industries. In addition an increase in publicly financed R&D causes output to increase implying that producers as well consumers are better off, despite the presence of strong monopoly power in some industries. A low bound for the `social' rate of return to publicly financed R&D is also calculated.
A model of endogenous growth is developed in which growth is driven by vertical innovations that involve creative destruction. Equilibrium is determined by a forward-looking difference equation, according to which the amount of research in any period depends negatively upon the amount expected next period. The paper analyzes positive and normative properties of stationary equilibria, and shows conditions for the existence of cyclical equilibria and no-growth traps. The growth rate may be more or less than optimal because a business-stealing effect counteracts the usual spillover and appropriability effects. In addition, innovations tend to be too small. Copyright 1992 by The Econometric Society.
The relationship between cointegration and error correction models, first suggested by Granger, is here extended and used to develop estimation procedures, tests, and empirical examples. A vector of time series is said to be cointegrated with cointegrating vector a if each element is stationary only after differencing while linear combinations a8xt are themselves stationary. A representation theorem connects the moving average , autoregressive, and error correction representations for cointegrated systems. A simple but asymptotically efficient two-step estimator is proposed and applied. Tests for cointegration are suggested and examined by Monte Carlo simulation. A series of examples are presented. Copyright 1987 by The Econometric Society.
This paper proposes unit root tests for dynamic heterogeneous panels based on the mean of individual unit root statistics. In particular it proposes a standardized t-bar test statistic based on the (augmented) Dickey–Fuller statistics averaged across the groups. Under a general setting this statistic is shown to converge in probability to a standard normal variate sequentially with T (the time series dimension) →∞, followed by N (the cross sectional dimension) →∞. A diagonal convergence result with T and N→∞ while N/T→k,k being a finite non-negative constant, is also conjectured. In the special case where errors in individual Dickey–Fuller (DF) regressions are serially uncorrelated a modified version of the standardized t-bar statistic is shown to be distributed as standard normal as N→∞ for a fixed T, so long as T>5 in the case of DF regressions with intercepts and T>6 in the case of DF regressions with intercepts and linear time trends. An exact fixed N and T test is also developed using the simple average of the DF statistics. Monte Carlo results show that if a large enough lag order is selected for the underlying ADF regressions, then the small sample performances of the t-bar test is reasonably satisfactory and generally better than the test proposed by Levin and Lin (Unpublished manuscript, University of California, San Diego, 1993).