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The impact of procurement-driven technological change on U.S. manufacturing productivity growth

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  • David Saal

Abstract

As we enter the 21st Century, technologies originally developed for defense purposes such as computers and satellite communications appear to have become a driving force behind economic growth in the United States. Paradoxically, almost all previous econometric models suggest that the largely defense-oriented federal industrial R&D funding that helped create these technologies had no discernible effect on U.S. industrial productivity growth. This paper addresses this paradox by stressing that defense procurement as well as federal R&D expenditures were targeted to a few narrowly defined manufacturing sub-sectors that produced high tech weaponry. Analysis employing data from the NBER Manufacturing Productivity Database and the BEA' s Input Output tables then demonstrates that defense procurement policies did have significant effects on the productivity performance of disaggregated manufacturing industries because of a process of procurement-driven technological change.

Suggested Citation

  • David Saal, 2001. "The impact of procurement-driven technological change on U.S. manufacturing productivity growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 12(6), pages 537-568.
    • Handle: RePEc:taf:defpea:v:12:y:2001:i:6:p:537-568
    DOI: 10.1080/10430710108405002
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    Citations

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    Cited by:

    1. Katsushi Mizuno & Go Igusa & Shio Ando & Eiji Takeda, 2016. "Plant to Implement Halt Index under 3 General Rules of Defense Armament Transfer: Development of New Index that Will Replace 1% Framework of GDP," International Journal of Social Science Studies, Redfame publishing, vol. 4(12), pages 38-46, December.
    2. Callado-Muñoz Francisco J. & Hromcová Jana & Utrero-González Natalia, 2019. "Trade and Military Alliances: Evidence from NATO," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 25(4), pages 1-8, December.
    3. Simon Wiederhold, 2009. "Government Spending Composition in a Simple Model of Schumpeterian Growth," Jena Economics Research Papers 2009-101, Friedrich-Schiller-University Jena.
    4. Antonio Fonfria & Paulina Correa-Burrows, 2010. "Effects Of Military Spending On The Profitability Of Spanish Defence Contractors," Defence and Peace Economics, Taylor & Francis Journals, vol. 21(2), pages 177-192.
    5. Jacques Fontanel, 2004. "Les déterminants des budgets militaires," Working Papers hal-02238176, HAL.
    6. Jacques Fontanel, 2005. "Determinants of military budgets," Post-Print hal-02238275, HAL.
    7. Javier Garc�a-Est�vez & Elisa Trujillo-Baute, 2014. "Drivers of R&D investment in the defence industry: evidence from Spain," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(1), pages 39-49, February.
    8. Jacques Fontanel, 2007. "Les fondements (avoués et non avoués) de l'évolution des dépenses militaires depuis 1990," Post-Print hal-02093285, HAL.
    9. Jacques Fontanel & Ivan Samson, 2008. "The determinants of military expenditures," Post-Print hal-02068194, HAL.
    10. Fanny Coulomb & Jacques Fontanel, 2005. "An Economic Interpretation Of French Military Expenditures," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(4), pages 297-315.
    11. Ruttan, Vernon W., 2008. "General Purpose Technology, Revolutionary Technology, and Technological Maturity," Staff Papers 6206, University of Minnesota, Department of Applied Economics.

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