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R&D-Productivity Dynamics: Causality, Lags, and "Dry Holes"

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Abstract

We study four issues in R&D–productivity dynamics: does R&D Granger cause productivity, is there a lag between R&D and its productivity effects, does the potency of R&D vary in timing and magnitude, and what is the role of R&D spillovers and aggregate shocks. The results suggest that R&D causes productivity but not vice versa, productivity responds to changes in R&D with a considerable lag, the potency of R&D varies in timing and magnitude, and that the elasticity of productivity with respect to aggregate shocks is high, but negligible with respect to R&D spillovers.

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Bibliographic Info

Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): V (2002)
Issue (Month): (May)
Pages: 123-156

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Handle: RePEc:cem:jaecon:v:5:y:2002:n:1:p:123-156

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Keywords: total factor productivity; TFP; R&D; causality; lag structure;

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References

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Cited by:
  1. Gabsi, Foued & Mhenni, Hatem & Koouba, Karim, 2010. "Determinants of Innovation in Emerging Country: an empirical study at the Tunisian firm level," MPRA Paper 46182, University Library of Munich, Germany, revised 2008.
  2. Lihong Yun, 2008. "Technical Progress and Labour Demand in Swedish Manufacturing Firms," Journal of Industry, Competition and Trade, Springer, Springer, vol. 8(2), pages 147-167, June.
  3. Maliranta, Mika, 2002. "From R&D to Productivity Through Micro-Level Restructuring," Discussion Papers, The Research Institute of the Finnish Economy 795, The Research Institute of the Finnish Economy.
  4. Claudio Bravo Ortega & Álvaro García Marín, 2008. "Exploring the Relationship between R&D and Productivity: A Country-Level Study," Working Papers, University of Chile, Department of Economics wp282, University of Chile, Department of Economics.
  5. Hulya Ulku, 2004. "RandD, innovation, and Economic Growth," IMF Working Papers, International Monetary Fund 04/185, International Monetary Fund.
  6. Maliranta, Mika, . "Micro Level Dynamics of Productivity Growth. An Empirical Analysis of the Great Leap in Finnish Manufacturing Productivity in 1975-2000," ETLA A, The Research Institute of the Finnish Economy, The Research Institute of the Finnish Economy, number 38.
  7. José; Miguel Benavente H., 2004. "Technological Innovation In Chile Where We Are and What Can be Done," Working Papers Central Bank of Chile, Central Bank of Chile 295, Central Bank of Chile.
  8. Maliranta, Mika & Rouvinen, Petri, 2003. "Productivity Effects of ICT in Finnish Business," Discussion Papers, The Research Institute of the Finnish Economy 852, The Research Institute of the Finnish Economy.
  9. Ali-Yrkkö, Jyrki & Maliranta, Mika, 2006. "Impact of R&D on Productivity - Firm-level Evidence from Finland," Discussion Papers, The Research Institute of the Finnish Economy 1031, The Research Institute of the Finnish Economy.
  10. Gabsi, Foued & Mhenni, Hatem & Koouba, Karim, 2008. "Innovation Determinants in Emerging Countries: An Empirical Study at the Tunisian Firms level," MPRA Paper 17940, University Library of Munich, Germany, revised 2008.
  11. Donoso, Patricio, 2014. "National Innovation Systems In Europe And Latin America: A Comparative Analysis," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 12(1), pages 33-62.
  12. Böckerman, Petri & Eero, Lehto & Huovari, Janne, 2008. "The return to the technological frontier: The conditional effect of plants’ R&D on their productivity in Finnish manufacturing," MPRA Paper 8715, University Library of Munich, Germany.
  13. Mika Maliranta, 2005. "R&D, International Trade and Creative Destruction—Empirical Findings from Finnish Manufacturing Industries," Journal of Industry, Competition and Trade, Springer, Springer, vol. 5(1), pages 27-58, January.
  14. Erdal Atukeren, 2005. "R&D Races and Spillovers between the EU and the US: Some Causal Evidence," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 05-105, KOF Swiss Economic Institute, ETH Zurich.

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