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Relationship Between Private and Public Investment in R&D: A Dynamic Panel Data Analysis

Author

Listed:
  • Tarek SADRAOUI

    (Department of Quantitative Methods; Economics and Management University of Sfax- Tunisia)

  • Adnen CHOCKRI

    () (Department of Quantitative Methods; University of Economics and Management, Sfax-Tunisia)

Abstract

This paper investigates the relationship between private and public investment in R&D, while taking into account the effect of several instruments policies such as subsidies and taxes. We design a new look of knowledge spillovers and R&D cooperation to explain the contribution of public and private R&D on growth. We propose a heterogeneous dynamic panel data model to consider the effect as well as endogenous. We also distinguish between the estimated long run and short run results. Our results based on a sample of 23 countries over the period 1992-2009 indicate that both public and private investment in R&D are complement. By establishing an endogenous growth model, the estimates indicate that public and private R&D depend on the host country’s human capital investment and that FDI is a more significant spillover channel than imports.

Suggested Citation

  • Tarek SADRAOUI & Adnen CHOCKRI, 2011. "Relationship Between Private and Public Investment in R&D: A Dynamic Panel Data Analysis," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 8, pages 197-212, December.
  • Handle: RePEc:aic:revebs:y:2011:i:8:sadraouit
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    References listed on IDEAS

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    More about this item

    Keywords

    R&D investment; Technology Spillovers; Complementarity; Economic growth; Dynamic Panel Data; Private investment; Public investment; R&D cooperation;

    JEL classification:

    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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