Measuring the social return to R&D

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Measuring the social return to R&D

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Charles I. Jones
John C. Williams

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Abstract

A large, empirical literature reports estimates of the rate of return to R&D ranging from 30 percent to over 100 percent, supporting the notion that there is too little private investment in research. This conclusion is challenged by the new growth theory. We derive analytically the relationship between the social rate of return to R&D and the coefficient estimates of the empirical literature. We show that these estimates represent a lower bound on the true social rate of return. Using a conservative estimate of the rate of return to R&D of about 30 percent, optimal R&D investment is at least four times larger than actual investment.

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Publisher Info
Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 1997-12.

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Date of creation: 1997
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Handle: RePEc:fip:fedgfe:1997-12

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Article
- Charles I. Jones & John C. Williams, 1998. "Measuring The Social Return To R&D," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1119-1135, November. [Downloadable!] (restricted)
Paper
- Charles I. Jones & John C. Williams, . "Measuring the Social Return to R&D," Working Papers 97002, Stanford University, Department of Economics. [Downloadable!]

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.:

Jeffrey I. Bernstein & M. Ishaq Nadiri, 1989. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," NBER Working Papers 2002, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," Working Papers 88-06, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
- Bernstein, Jeffrey I & Nadiri, M Ishaq, 1989. "Research and Development and Intra-industry Spillovers: An Empirical Application of Dynamic Duality," Review of Economic Studies, Blackwell Publishing, vol. 56(2), pages 249-67, April. [Downloadable!] (restricted)
Kim B. Clark & Zvi Griliches, 1982. "Productivity Growth and R&D at the Business Level: Results From the PIMS Data Base," NBER Working Papers 0916, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Kim B. Clark & Zvi Griliches, 1984. "Productivity Growth and R&D at the Business Level: Results from the PIMS Data Base," NBER Chapters, in: R & D, Patents, and Productivity, pages 393-416 National Bureau of Economic Research, Inc. [Downloadable!]
- Zvi Griliches, 1998. "Productivity Growth and R&D at the Business Level: Results from the PIMS Data Base," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 134-156 National Bureau of Economic Research, Inc. [Downloadable!]
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:
- Bronwyn H. Hall & Jacques Mairesse, 1995. "Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms," NBER Working Papers 3956, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Scherer, F M, 1982. "Inter-Industry Technology Flows and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 627-34, November. [Downloadable!] (restricted)
Stokey, Nancy L, 1995. "R&D and Economic Growth," Review of Economic Studies, Blackwell Publishing, vol. 62(3), pages 469-89, July. [Downloadable!] (restricted)
Zvi Griliches, 1992. "The Search for R&D Spillovers," NBER Working Papers 3768, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
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- Zvi Griliches, 1998. "The Search for R&D Spillovers," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 251-268 National Bureau of Economic Research, Inc. [Downloadable!]
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Other versions:
- Adam B. Jaffe, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value," NBER Working Papers 1815, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Sveikauskas, Leo, 1981. "Technological Inputs and Multifactor Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 275-82, May. [Downloadable!] (restricted)
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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!]
M. Ishaq Nadiri, 1993. "Innovations and Technological Spillovers," NBER Working Papers 4423, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
Other versions:
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
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- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
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Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
Other versions:
- Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

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