The return to the technological frontier: The conditional effect of plants’ R&D on their productivity in Finnish manufacturing
AbstractThis paper examines, through the use of plant-level data, whether R&D’s productivity impact is contingent on the distance of a plant’s productivity from the industry’s technological frontier. R&D is specified as an accumulated stock from R&D investments. We analyse the productivity effect of a plant’s own R&D as well as the productivity impact of the plant’s parent firm’s and other firms’ proximity-weighted R&D stocks. The results show that a plant’s own and a parent firm’s R&D have a positive productivity impact and that the former impact decreases as the distance from the industry’s technological frontier increases. Furthermore, the productivity effect of other firms’ proximity-weighted R&D is, on average, positive, but this impact increases in the distance from the technological frontier. Another important finding is that all the plants tend to converge towards the industry’s technological frontier despite the size of external R&D spillovers.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 8715.
Date of creation: 12 May 2008
Date of revision:
productivity; efficiency; technological frontier; spillovers; convergence;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L00 - Industrial Organization - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-17 (All new papers)
- NEP-EFF-2008-05-17 (Efficiency & Productivity)
- NEP-INO-2008-05-17 (Innovation)
- NEP-IPR-2008-05-17 (Intellectual Property Rights)
- NEP-KNM-2008-05-17 (Knowledge Management & Knowledge Economy)
- NEP-MIC-2008-05-17 (Microeconomics)
- NEP-TID-2008-05-17 (Technology & Industrial Dynamics)
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