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The Importance of R&D and Innovation for Productivity: A Reexamination in Light of the 2000 French Innovation Survey

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  • Jacques MAIRESSE
  • Pierre MOHNEN
  • Elizabeth KREMP

Abstract

This paper consists in a detailed robustness investigation of the Crépon, Duguet and Mairesse [1998] (CDM) econometric framework, which encompasses as a reduced form equation the production function extended to R&D, as pioneered by Zvi Griliches. We focus on the sensitivity of the estimated productivity elasticities of innovation and R&D, with respect to different model specifications and estimation methods, and to the different innovation output quantitative and qualitative indicators available in the 1998-2000 French Community Innovation Survey. The main conclusion we draw is that as long as we properly correct for endogeneity and also, when appropriate, for selectivity, we find again estimates of the productivity elasticities of R&D and of the corresponding median rates of return to R&D, which are close to the usual estimates from the extended Cobb-Douglas production function. We interpret the need to instrument innovation and R&D as revealing important measurement errors in the innovation intensity variables, as well as but to a lesser extent in the innovation binary indicators, the R&D intensity variable and binary indicator. Although innovation surveys unveil interesting information and the CDM model is a good framework, which can both be used to advance our understanding of the firm R&D and innovation activities and performances, much more remains to be done to improve the quality of the data and relevance of the analysis.

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File URL: http://www.jstor.org/stable/20777586
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Bibliographic Info

Article provided by ENSAE in its journal Annals of Economics and Statistics.

Volume (Year): (2005)
Issue (Month): 79-80 ()
Pages: 487-527

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Handle: RePEc:adr:anecst:y:2005:i:79-80:p:19

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Cited by:
  1. Gustavo Crespi & Pluvia Zuniga, 2010. "Innovation and Productivity - Evidence from Six Latin American Countries," Research Department Publications 4690, Inter-American Development Bank, Research Department.
  2. Jacques Mairesse & Pierre Mohnen, 2010. "Using Innovations Surveys for Econometric Analysis," NBER Working Papers 15857, National Bureau of Economic Research, Inc.
  3. Bronwyn H. Hall, 2011. "Innovation and Productivity," NBER Working Papers 17178, National Bureau of Economic Research, Inc.
  4. Wladimir Raymond & Jacques Mairesse & Pierre Mohnen & Franz Palm, 2013. "Dynamic Models of R&D, Innovation and Productivity: Panel Data Evidence for Dutch and French Manufacturing," NBER Working Papers 19074, National Bureau of Economic Research, Inc.
  5. Bronwyn H. Hall & Jacques Mairesse & Pierre Mohnen, 2009. "Measuring the Returns to R&D," NBER Working Papers 15622, National Bureau of Economic Research, Inc.
  6. Waheed, Abdul, 2011. "Innovation and firm-level productivity: econometric evidence from Bangladesh and Pakistan," MERIT Working Papers 061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Michael Polder & George van Leeuwen & Pierre Mohnen & Wladimir Raymond, 2010. "Product, Process and Organizational Innovation: Drivers, Complementarity and Productivity Effects," DRUID Working Papers 10-24, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  8. Mohnen, Pierre & Hall, Bronwyn H., 2013. "Innovation and productivity: An update," MERIT Working Papers 021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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