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The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data

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  • Lichtenberg, Frank R
  • Siegel, Donald

Abstract

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.

Suggested Citation

  • Lichtenberg, Frank R & Siegel, Donald, 1991. "The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 203-229, April.
    • Handle: RePEc:oup:ecinqu:v:29:y:1991:i:2:p:203-29
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    References listed on IDEAS

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    1. Zvi Griliches, 1998. "Productivity Growth and R&D at the Business Level: Results from the PIMS Data Base," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 134-156, National Bureau of Economic Research, Inc.
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    3. James L. Monahan & Frank M. Gollop, 1986. "From Homogeneity to Heterogeneity: An Index of Diversification," Boston College Working Papers in Economics 129, Boston College Department of Economics.
    4. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    5. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-1112, December.
    6. William D. Nordhaus, 1980. "Policy Responses to the Productivity Slowdown," Cowles Foundation Discussion Papers 555, Cowles Foundation for Research in Economics, Yale University.
    7. Wesley M. Cohen & Richard C. Levin & David C. Mowery, 1987. "Firm Size and R&D Intensity: A Re-Examination," NBER Working Papers 2205, National Bureau of Economic Research, Inc.
    8. Stern, Robert M & Baum, Christopher F & Greene, Mark N, 1979. "Evidence on Structural Change in the Demand for Aggregate U.S. Imports and Exports," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 179-192, February.
    9. Zvi Griliches, 1984. "R&D, Patents, and Productivity," NBER Books, National Bureau of Economic Research, Inc, number gril84-1, March.
    10. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    11. Cohen, Wesley M & Levin, Richard C & Mowery, David C, 1987. "Firm Size and R&D Intensity: A Re-examination," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 543-565, June.
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