Measuring the Returns of Research and Development: An Empirical Study of the German Manufacturing Sector over 45 Years
AbstractMotivated by recent statistics that show significant growth in labor productivity, this paper seeks to analyze the relationship between domestic R&D, knowledge stock and productivity dynamics. Time series data of the German manufacturing industry is used to estimate a variable cost function with the stock of knowledge being dependent upon current and past R&D spending. The estimates indicate that 50 percent of the effects of R&D on the knowledge stock appear within four years. However, the rate of return on R&D are shown to be drastically declining; recent rates of return on R&D are estimated to have reached an all-time low spanning the last 45 years. Current yields of R&D are only one third compared to the sixties. In conclusion, though the productivity slowdown of the seventies seems to have been overcome, this is not attributed to R&D investments.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The German University in Cairo, Faculty of Management Technology in its series Working Papers with number 10.
Length: 24 pages
Date of creation: May 2008
Date of revision:
Productivity; innovation; research; development; technology; productivity slowdown;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-31 (All new papers)
- NEP-EFF-2008-05-31 (Efficiency & Productivity)
- NEP-INO-2008-05-31 (Innovation)
- NEP-KNM-2008-05-31 (Knowledge Management & Knowledge Economy)
- NEP-TID-2008-05-31 (Technology & Industrial Dynamics)
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.:
- David B. audretsch & Erik E. Lehmann, 2005. "Mansfield's Missing Link: The Impact of Knowledge Spillovers on Firm Growth," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 207-210, 01.
- Beise, Marian & Stahl, Harald, 1998.
"Public research and industrial innovations in Germany,"
ZEW Discussion Papers
98-37, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Beise, Marian & Stahl, Harald, 1999. "Public research and industrial innovations in Germany," Research Policy, Elsevier, vol. 28(4), pages 397-422, April.
- 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.
- 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.
- David Audretsch & Erik Lehmann, 2006.
"Do locational spillovers pay? empirical evidence from German IPO data,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 15(1), pages 71-81.
- Audretsch, David B & Lehmann, Erik E, 2005. "Do Locational Spillovers Pay? Empirical Evidence from German IPO Data," CEPR Discussion Papers 4949, C.E.P.R. Discussion Papers.
- Flaig, Gebhard & Steiner, Viktor, 1993. "Searching for the "Productivity Slowdown": Some Surprising Findings from West German Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 57-65, February.
- Popp, David C., 2001. "The effect of new technology on energy consumption," Resource and Energy Economics, Elsevier, vol. 23(3), pages 215-239, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lobna Sameer).
If references are entirely missing, you can add them using this form.