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Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector

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  • Haskel, Jonathan

    ()
    (Imperial College London)

  • Wallis, Gavin

    ()
    (University College London)

Abstract

Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other “research” activities, such as software. Second, argument still rages about the efficacy of direct public spending on R&D via spending on academic research councils, universities, and government undertaken work on civil and military R&D. To evaluate these questions we use data on market sector productivity, R&D and non-R&D intangible assets, and public sector R&D spending. We look for evidence of market sector spillovers from intangible investment and from public R&D. We find (a) no evidence of spillover effects from intangible investment at the market sector level, including from R&D, (b) strong evidence of market sector spillovers from public R&D spend on research councils, and (c) no evidence of market sector spillovers from public spending on civil or defence R&D. Our findings tentatively suggest that for maximum market sector productivity impact government innovation policy should focus on direct spending on research councils.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4772.

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Length: 28 pages
Date of creation: Feb 2010
Date of revision:
Publication status: published in: Economics Letters, online first
Handle: RePEc:iza:izadps:dp4772

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Keywords: R&D; productivity; intangible assets; spillovers;

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References

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  1. Mansfield, Edwin, 1998. "Academic research and industrial innovation: An update of empirical findings1," Research Policy, Elsevier, Elsevier, vol. 26(7-8), pages 773-776, April.
  2. Haskel, J & Goodridge, P & Wallis, G, 2012. "UK Innovation Index: productivity and growth in UK industries," Working Papers, Imperial College, London, Imperial College Business School 9786, Imperial College, London, Imperial College Business School.
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  14. Haskel, J & Clayton, T & Goodridge, P & Pesole, A & Barnett, D & Chamberlain, G & Jones, R & Khan, K & Turvey, A, 2010. "Innovation, knowledge spending and productivity growth in the UK: interim report for NESTA 'Innovation Index? project," Working Papers, Imperial College, London, Imperial College Business School 5279, Imperial College, London, Imperial College Business School.
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Citations

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Cited by:
  1. Amani Elnasri & Kevin J. Fox, 2014. "The Contribution of Research and Innovation to Productivity and Economic Growth," Discussion Papers, School of Economics, The University of New South Wales 2014-08, School of Economics, The University of New South Wales.
  2. Dan Corry & Anna Valero & John Van Reenen, 2011. "UK Economic Performance Since 1997: Growth, Productivity and Jobs," CEP Special Papers, Centre for Economic Performance, LSE 24, Centre for Economic Performance, LSE.
  3. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," NIESR Discussion Papers, National Institute of Economic and Social Research 11717, National Institute of Economic and Social Research.
  4. Ana Rincon & Michela VECCHI & Francesco VENTURINI, 2012. "ICT spillovers, absorptive capacity and productivity performance," Quaderni del Dipartimento di Economia, Finanza e Statistica, Università di Perugia, Dipartimento Economia, Finanza e Statistica 103/2012, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  5. Paz Grimberg & Zeev Schuss, 2014. "Stochastic model of a pension plan," Papers 1407.0517, arXiv.org.
  6. Federica Rossi & Ainurul Rosli, 2013. "Indicators of university-industry knowledge transfer performance and their implications for universities: Evidence from the UK’s HE-BCI survey," Working Papers, Birkbeck Centre for Innovation Management Research 13, Birkbeck Centre for Innovation Management Research, revised Aug 2013.

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