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Accounting for Research and Productivity Growth Across Industries

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  • L. Rachel Ngai
  • Roberto M. Samaniego

Abstract

What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry specific parameters in the production functions for output and knowledge, and in consumer preferences. We find that industry differences in both productivity growth and R&D intensity mainly reflect differences in "technological opportunities", interpreted as parameters of knowledge production. These include the capital intensity of R&D, knowledge spillovers, and diminishing returns to R&D. Among these parameters, we find that the degree of diminishing returns to R&D is the dominant factor when the model is calibrated to account for crossindustry differences in the US.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0914.

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Date of creation: Mar 2009
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Handle: RePEc:cep:cepdps:dp0914

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Multisector growth; total factor productivity; R&D intensity; technological opportunity;

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Citations

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Cited by:
  1. Jianghuai Zheng & Lili Zhang & Yu Wang, 2011. "The underdevelopment of service industry in china: An empirical study of cities in Yangtze River Delta," Frontiers of Economics in China, Springer, vol. 6(3), pages 413-446, September.
  2. Stijepic, Denis & Wagner, Helmut, 2011. "Implementation of technological breakthroughs at sector level and the technology-bias," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48707, Verein für Socialpolitik / German Economic Association.
  3. L. Rachel Ngai & Roberto M. Samaniego, 2009. "Accounting for research and productivity growth across industries," LSE Research Online Documents on Economics 25496, London School of Economics and Political Science, LSE Library.
  4. Aiello, Francesco & Pupo, Valeria & Ricotta, Fernanda, 2013. "Firm heterogeneity in TFP, sectoral innovation and geography. Evidence from Italy," MPRA Paper 48573, University Library of Munich, Germany.
  5. Venturini, Francesco, 2012. "Looking into the black box of Schumpeterian growth theories: An empirical assessment of R&D races," European Economic Review, Elsevier, vol. 56(8), pages 1530-1545.
  6. Barbosa, Natália & Faria, Ana Paula, 2011. "Innovation across Europe: How important are institutional differences?," Research Policy, Elsevier, vol. 40(9), pages 1157-1169.
  7. Lei Ji, 2013. "Cross-industry tfp growth differences with asymmetric industries and the endogenous market structure," Documents de Travail de l'OFCE 2013-17, Observatoire Francais des Conjonctures Economiques (OFCE).
  8. Angus Chu, 2010. "Effects of patent length on R&D: a quantitative DGE analysis," Journal of Economics, Springer, vol. 99(2), pages 117-140, March.
  9. Roberto Samaniego & Anna Ilyina, 2009. "A Multi-industry Model of Growth with Financing Constraints," 2009 Meeting Papers 467, Society for Economic Dynamics.
  10. Zheng, Jianghuai & Zhang, Lili & Wang, Yu, 2010. "The underdevelopment of service industry in China: an empirical study of cities in Yangtze River Delta," MPRA Paper 33125, University Library of Munich, Germany, revised Jun 2011.
  11. Ilyina, Anna & Samaniego, Roberto, 2012. "Structural change and financing constraints," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 166-179.
  12. Huang, Chien-Yu & Ji, Lei, 2013. "Knowledge-intensive business services and economic growth with endogenous market structure," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 95-106.
  13. Samaniego, Roberto M., 2013. "Knowledge spillovers and intellectual property rights," International Journal of Industrial Organization, Elsevier, vol. 31(1), pages 50-63.
  14. Roberto Samaniego, 2013. "Stages of Diversification and Industry Productivity Differences," 2013 Meeting Papers 774, Society for Economic Dynamics.

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