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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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  1. Bronwyn H. Hall, Jacques Mairesse, Lee Branstetter, and Bruno Crepon., 1998. "Does Cash Flow Cause Investment and R& D: An Exploration Using Panel Data for French, Japanese, and United States Scientific Firms," Economics Working Papers 98-260, University of California at Berkeley.
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Citations

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Cited by:
  1. Maliranta, Mika & Mohnen, Pierre & Rouvinen, Petri, 2008. "Is Inter-firm Labor Mobility a Channel of Knowledge Spillovers? Evidence from a Linked Employer-Employee Panel," Discussion Papers 1116, The Research Institute of the Finnish Economy.
  2. Gustavo Crespi & Rodrigo Fuentes & Roberto Alvarez & Jeffrey Orozco, 2010. "Nota técnica sobre el sistema nacional de innovación de Costa Rica: Una contribución al diálogo de políticas públicas entre el Gobierno de La República de Costa Rica y el Banco Inter-Americano ," IDB Publications 8608, Inter-American Development Bank.
  3. Maliranta, Mika & Rouvinen, Petri, 2003. "Productivity Effects of ICT in Finnish Business," Discussion Papers 852, The Research Institute of the Finnish Economy.
  4. Erdal Atukeren, 2005. "R&D Races and Spillovers between the EU and the US: Some Causal Evidence," KOF Working papers 05-105, KOF Swiss Economic Institute, ETH Zurich.
  5. 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.
  6. Felipe Larraín B., 2006. "Innovación en Chile: Análisis y propuestas," IDB Publications 17058, Inter-American Development Bank.
  7. Lihong Yun, 2008. "Technical Progress and Labour Demand in Swedish Manufacturing Firms," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 147-167, June.
  8. 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.
  9. Maliranta, Mika, 2002. "From R&D to Productivity Through Micro-Level Restructuring," Discussion Papers 795, The Research Institute of the Finnish Economy.
  10. Ali-Yrkkö, Jyrki & Maliranta, Mika, 2006. "Impact of R&D on Productivity - Firm-level Evidence from Finland," Discussion Papers 1031, The Research Institute of the Finnish Economy.
  11. Gustavo Crespi & Galileo Solís & Ezequiel Tacsir, 2011. "Evaluación del impacto de corto plazo de SENACYT en la innovación de las empresas panameñas," IDB Publications 38218, Inter-American Development Bank.

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