Rising R&D Intensity and Economic Growth
AbstractOver the past decades, private R&D spending in the US and other developed countries has been growing faster than GDP. In the United States, for example, R&D expenditures (excluding those funded by the federal government) have grown from 0.63% of GDP in 1953 to 1.95% of GDP in 2007, i.e. R&D intensity has increased by more than a factor of three in half a century. At the same time, the growth rates of per capita and aggregate output have been rather stable, possibly declining slightly. Standard models of endogenous growth and R&D cannot easily reproduce or explain this observation, not even along a transition path. This paper proposes a growth model that can account for the observed phenomenon by explicitly describing competition among technological leaders and followers in individual markets in a way that is consistent with existing studies on firms’ motivation to invest in R&D. The model shows that it is possible that the eventually unsustainable trend of rising R&D intensity persists for a very long time.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c015_057.
Length: 37 pages
Date of creation: Sep 2010
Date of revision:
Endogenous Growth; Research & Development; Market Structure;
Other versions of this item:
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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