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Productivity Growth, Environmental Regulations and the Composition of R&D

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  • Albert N. Link

Abstract

The average annual rate of productivity growth in the United States has fallen since the mid-1960s. One factor often cited for this trend is the slowdown in the level of R&D spending. In considering this factor, many researchers have examined the correlation between productivity growth and R&D spending and found that it was positive through the 1960s but near zero in the 1970s. This latter result has raised the question as to whether the productivity of R&D has collapsed. Evidence is presented in this article that the collapse of R&D in empirical productivity equations is conceptually misleading because a significant portion of R&D was directed in the 1970s toward compliance with environmental regulations. These expenditures appear to be negatively related to measured productivity growth.

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Bibliographic Info

Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 13 (1982)
Issue (Month): 2 (Autumn)
Pages: 548-554

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Handle: RePEc:rje:bellje:v:13:y:1982:i:autumn:p:548-554

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Cited by:
  1. Menezes-Filho, Naercio & Van Reenen, John, 2003. "Unions and Innovation: A Survey of the Theory and Empirical Evidence," CEPR Discussion Papers 3792, C.E.P.R. Discussion Papers.

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