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A Schumpeter-Inspired Approach to the Construction of R&D Capital Stocks

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Author Info
Jürgen Bitzer
Andreas Stephan

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Abstract

A new method for constructing R&D capital stocks is proposed. Following Schumpeter, the development of R&D capital stocks is modelled as a process of creative destruction. Newly generated knowledge is assumed not only to add to the existing R&D capital stocks but also, by displacing old knowledge, to destroy part of that capital. This is in stark contrast to the perpetual inventory method, which postulates a constant rate of depreciation. We compare both methods by estimating the impact of R&D and spillovers on output in OECD countries, and find that the new approach leads to more sensible and robust results.

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Publisher Info
Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 300.

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Length: 19 p.
Date of creation: 2002
Date of revision:
Publication status: Published in: Applied Economics (2007), 153-167
Handle: RePEc:diw:diwwpp:dp300

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Related research
Keywords: R&D capital stocks; knowledge spillovers; creative destruction;

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Find related papers by JEL classification:
C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
D62 - Microeconomics - - Welfare Economics - - - Externalities

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January. [Downloadable!] (restricted)
    Other versions:
  2. Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66, pages 419. [Downloadable!] (restricted)
  3. Wolfgang Keller, 1999. "How Trade Patterns and Technology Flows Affect Productivity Growth," NBER Working Papers 6990, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Edmond, Chris, 2001. "Some Panel Cointegration Models of International R&D Spillovers," Journal of Macroeconomics, Elsevier, vol. 23(2), pages 241-260, April. [Downloadable!] (restricted)
  5. Zvi Griliches, 1992. "The Search for R&D Spillovers," NBER Working Papers 3768, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Verspagen, Bart, 1997. "Measuring Intersectoral Technology Spillovers: Estimates from the European and US Patent Office Databases," Economic Systems Research, Taylor and Francis Journals, vol. 9(1), pages 47-65, March.
  7. Wolfgang Keller, 2001. "The Geography and Channels of Diffusion at the World's Technology Frontier," NBER Working Papers 8150, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Jürgen Bitzer, 2005. "Measuring Knowledge Stocks: A Process of Creative Destruction," Kyklos, Blackwell Publishing, vol. 58(3), pages 379-393, 07. [Downloadable!] (restricted)
  9. Chihwa Kao & Min-Hsien Chiang & Bangtian Chen, 1999. "International R&D Spillovers: An Application of Estimation and Inference in Panel Cointegration," Center for Policy Research Working Papers 4, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
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  10. Atella, Vincenzo & Quintieri, Beniamino, 2001. "Do R&D Expenditures Really Matter for TFP?," Applied Economics, Taylor and Francis Journals, vol. 33(11), pages 1385-89, September. [Downloadable!] (restricted)
  11. Nestor Terleckyj, 1980. "Direct and Indirect Effects of Industrial Research and Development on the Productivity Growth of Industries," NBER Chapters, in: New Developments in Productivity Measurement, pages 357-386 National Bureau of Economic Research, Inc. [Downloadable!]
  12. Jungsoo Park, 2004. "International and Intersectoral R&D Spillovers in the OECD and East Asian Economies," Economic Inquiry, Oxford University Press, vol. 42(4), pages 739-757, October. [Downloadable!] (restricted)
  13. David T. Coe & Elhanan Helpman, 1993. "International R&D Spillovers," IMF Working Papers 93/84, International Monetary Fund.
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  14. Roberto ESPOSTI & Pierpaolo PIERANI, 2001. "Building the Knowledge Stock: Lags, Depreciation and Uncertainty in Agricultural R&D," Working Papers 145, Universita' Politecnica delle Marche (I), Dipartimento di Economia. [Downloadable!]
  15. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring. [Downloadable!] (restricted)
    Other versions:
  16. Wolfgang Keller, 1997. "Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners," NBER Working Papers 6065, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Bart Verspagen, 1997. "Estimating international technology spillovers using technology flow matrices," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(2), pages 226-248, 06. [Downloadable!] (restricted)
  18. Baltagi, Badi H. & Boozer, Michael A., 1997. "Econometric Analysis of Panel Data," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pedro Mazeda Gil & Óscar Afonso, 2008. "Technological-Knowledge Dynamics in Lab-Equipment Models of Quality Ladders," FEP Working Papers 283, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  2. Alexandre Almeida & Aurora A.C. Teixeira, 2007. "Does Patenting negatively impact on R&D investment?An international panel data assessment," FEP Working Papers 255, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  3. Fabio Montobbio & Valerio Sterzi, 2008. "Inventing Together: Exploring the Nature of International Knowledge Spillovers in Latin America," CESPRI Working Papers 225, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Nov 2008. [Downloadable!]
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