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Determinants of National R&D and Patenting: Application to a Small, Distant Country

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Author Info

  • Crawford, Ron

    (Ministry of Economic Development, New Zealand)

  • Fabling, Richard

    (Ministry of Economic Development, New Zealand)

  • Grimes , Arthur

    (Motu Economic & Public Policy Research and University of Waikato)

  • Bonner, Nick

    ()
    (Ministry of Economic Development, New Zealand)

Abstract

We analyse the determinants of national R&D expenditure and patenting activity. In contrast to most related studies, we account for factors that impact on small, distant countries. These factors include country size, firm size, distance from major economic centres, and industrial structure. We apply the results to New Zealand, which has a low rate of privately funded R&D. We find that R&D expenditure and patenting activity are negatively affected by having a preponderance of small firms, having a heavy reliance on agriculture and also by distance of a country from major world centres. Population size is found to have no impact on either R&D or patenting. Greater R&D increases patenting, with an elasticity that indicates moderately increasing returns to scale in the relationship between R&D inputs and patent outcomes. Better intellectual property protection within a country also increases patenting activity. Once we control for these factors, New Zealand is not an outlier with respect to its R&D expenditures; it is a positive outlier with regard to patenting.

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Bibliographic Info

Paper provided by Ministry of Economic Development, New Zealand in its series Occasional Papers with number 06/2.

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Length: 59 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:ris:nzmedo:2006_002

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Keywords: R&D; patents; economic geography;

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References

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  1. Bronwyn H. Hall and Adam Jaffe, and Manuel Trajtenberg., 2001. "Market Value and Patent Citations: A First Look," Economics Working Papers E01-304, University of California at Berkeley.
  2. Joachim Zietz & Bichaka Fayissa, 1992. "R & D expenditures and import competition: Some evidence for the U.S," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 128(1), pages 52-66, March.
  3. Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
  4. William F. Maloney & Daniel Lederman, 2004. "R&D and Development," Econometric Society 2004 Latin American Meetings 216, Econometric Society.
  5. Elhanan Helpman, 1997. "R&D and Productivity: The International Connection," NBER Working Papers 6101, National Bureau of Economic Research, Inc.
  6. Goolsbee, Austan, 1998. "Does Government R&D Policy Mainly Benefit Scientists and Engineers?," American Economic Review, American Economic Association, vol. 88(2), pages 298-302, May.
  7. Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D : productivity growth in a panel of OECD industries," LSE Research Online Documents on Economics 784, London School of Economics and Political Science, LSE Library.
  8. Wesley M. Cohen & Richard C. Levin & David C. Mowery, 1987. "Firm Size and R&D Intensity: A Re-Examination," NBER Working Papers 2205, National Bureau of Economic Research, Inc.
  9. James D. Adams & Eric P. Chiang & Katara Starkey, 2000. "Industry-University Cooperative Research Centers," NBER Working Papers 7843, National Bureau of Economic Research, Inc.
  10. Lanjouw, Jean O & Schankerman, Mark, 2004. "Protecting Intellectual Property Rights: Are Small Firms Handicapped?," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 45-74, April.
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  12. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-70, December.
  13. Andrea Bassanini & Stefano Scarpetta, 2002. "Growth, Technological Change, and ICT Diffusion: Recent Evidence from OECD Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 18(3), pages 324-344.
  14. George Symeonidis, 1996. "Innovation, Firm Size and Market Structure: Schumpeterian Hypotheses and Some New Themes," OECD Economics Department Working Papers 161, OECD Publishing.
  15. Charles I. Jones & John C. Williams, 1997. "Measuring the social return to R&D," Finance and Economics Discussion Series 1997-12, Board of Governors of the Federal Reserve System (U.S.).
  16. Sunil Kanwar & Robert Evenson, 2003. "Does intellectual property protection spur technological change?," Oxford Economic Papers, Oxford University Press, vol. 55(2), pages 235-264, April.
  17. Duncan Mills & Jason Timmins, 2004. "Firm Dynamics in New Zealand: A Comparative Analysis with OECD Countries," Treasury Working Paper Series 04/11, New Zealand Treasury.
  18. Acs, Zoltan J & Audretsch, David B & Feldman, Maryann P, 1992. "Real Effects of Academic Research: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 363-67, March.
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Cited by:
  1. Davis, Nick, 2006. "Business R&D, Innovation and Economic Growth: An Evidence-Based Synthesis of the Policy Issues," Occasional Papers 06/8, Ministry of Economic Development, New Zealand.
  2. Procter, Roger, 2011. "Echanching Productivity: Towards an Updated Action Agenda," Occasional Papers 11/1, Ministry of Economic Development, New Zealand.
  3. Julia Hall & Grant M Scobie, 2006. "The Role of R&D in Productivity Growth: The Case of Agriculture in New Zealand: 1927 to 2001," Treasury Working Paper Series 06/01, New Zealand Treasury.

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