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R&D and Productivity Growth: Comparing Japanese and U.S. Manufacturing Firms

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  • Zvi Griliches
  • Jacques Mairesse

Abstract

We compute rates of growth in labor productivity during the 1973-80 period for samples of individual manufacturing firms, in both Japan and the U.S., and relate them to differences in the rates of growth in their capital-labor ratios and in their intensities of R&D effort. Japanese firms spent about as much of their own money on R&D, relative to sales, as did similar U.S.firms. An econometric analysis of R&D performing firms leads to the acceptance of the hypothesis that the contribution of such expenditures to productivity growth was about the same in both countries. Hence, the rather large differences on the observed rates of productivity growth between the two countries can not be accounted for by differences in either the intensity or fecundity of such expenditures. We do find two important differences between the two countries which help to explain a significant fraction of the observed differences in productivity but require in turn, an explanation of their own: 1) Japanese firms reduced their employment levels significantly during this period while US firms were increasing theirs. This, by itself, accounts for the twice as fast growth in capital-labor ratio in Japanese manufacturing. 2) The estimated effect of the growth in the capital-labor ratio on firm productivity is approximately twice as large in Japan than in the US. The two factors together can account for about half of the observed differences in the average rates of productivity growth between the two countries.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1778.

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Date of creation: Dec 1985
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Publication status: published as Productivity Growth in Japan and the United States, edited by Charles R. Hulten, pp. 317-340. Chicago: University of Chicago Press, 1990.
Handle: RePEc:nbr:nberwo:1778

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  1. Bronwyn H. Hall & Clint Cumminq & Elizabeth S. Laderman & Joy Mundy, 1988. "The R&D Master File Documentation," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0072, National Bureau of Economic Research, Inc.
  2. Pierre A. Mohnen & M. Ishaq Nadiri & Ingmar R. Prucha, 1984. "R&D, Production Structure, and Productivity Growth in the U.S., Japaneseand German Manufacturing Sectors," NBER Working Papers 1264, National Bureau of Economic Research, Inc.
  3. Philippe Cuneo & Jacques Mairesse, 1983. "Productivity and R&D at the Firm Level in French Manufacturing," NBER Working Papers 1068, National Bureau of Economic Research, Inc.
  4. Zvi Griliches, 1998. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?," NBER Chapters, National Bureau of Economic Research, Inc, in: R&D and Productivity: The Econometric Evidence, pages 213-240 National Bureau of Economic Research, Inc.
  5. John Bound & Clint Cummins & Zvi Griliches & Bronwyn H. Hall & Adam B. Jaffe, 1984. "Who Does R&D and Who Patents?," NBER Chapters, National Bureau of Economic Research, Inc, in: R & D, Patents, and Productivity, pages 21-54 National Bureau of Economic Research, Inc.
  6. Griliches, Zvi & Mairesse, Jacques, 1983. "Comparing productivity growth: An exploration of french and U.S. industrial and firm data," European Economic Review, Elsevier, Elsevier, vol. 21(1-2), pages 89-119.
  7. Jacques Mairesse & Philippe Cunéo, 1985. "Recherche-développement et performances des entreprises : une étude économétrique sur données individuelles," Revue Économique, Programme National Persée, Programme National Persée, vol. 36(5), pages 1001-1042.
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  1. Scotland's R&D: problem, or opportunity?
    by Brian Ashcroft in Scottish Economy Watch on 2012-05-12 13:55:08
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