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R&D Productivity and the Spillover Effects of High-tech Industry on the Traditional Manufacturing Sector: The Case of Taiwan

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  • Kuen-Hung Tsai
  • Jiann-Chyuan Wang

Abstract

This study sets out to estimate the impact of R&D on productivity within the private sector, with further analysis of the different impacts of R&D within high-tech and traditional manufacturing firms. We also attempt to examine the spillover effects from R&D investment in the high-tech sector on productivity growth within the traditional industries. Using a sample of 136 large manufacturing firms during the period 1994-2000, we develop an extended version of the Cobb-Douglas production function model, and our findings suggest that Taiwan's R&D investment had a significant impact on firm productivity growth, with output elasticity standing at around 0.18. When the sample is divided into high-tech and traditional firms, the R&D output elasticity in high-tech firms is significantly greater than that found in traditional firms. In addition, the average rate of return in high-tech firms is much greater than that estimated for other industries. Besides, our empirical results show that, although significant, the impact of R&D investment from the high-tech sector, on the productivity growth of traditional firms, is rather limited. Copyright 2004 Blackwell Publishing Ltd.

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  • Kuen-Hung Tsai & Jiann-Chyuan Wang, 2004. "R&D Productivity and the Spillover Effects of High-tech Industry on the Traditional Manufacturing Sector: The Case of Taiwan," The World Economy, Wiley Blackwell, vol. 27(10), pages 1555-1570, November.
  • Handle: RePEc:bla:worlde:v:27:y:2004:i:10:p:1555-1570
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    Citations

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    Cited by:

    1. Sajid Anwar & Sizhong Sun, 2014. "Entry of foreign firms and the R&D behaviour: a panel data study of domestic and foreign firms in China's manufacturing sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(8), pages 739-757, November.
    2. Peters, Bettina & Licht, Georg & Crass, Dirk & Kladroba, Andreas, 2009. "Soziale Erträge der FuE-Tätigkeit in Deutschland: Endbericht," Studien zum deutschen Innovationssystem 15-2009, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    3. Subal Kumbhakar & Raquel Ortega-Argilés & Lesley Potters & Marco Vivarelli & Peter Voigt, 2012. "Corporate R&D and firm efficiency: evidence from Europe’s top R&D investors," Journal of Productivity Analysis, Springer, vol. 37(2), pages 125-140, April.
    4. Mario Pianta & Andrea Vaona, 2007. "Innovation and Productivity in European Industries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(7), pages 485-499.
    5. Tsai, Kuen-Hung & Wang, Jiann-Chyuan, 2005. "Does R&D performance decline with firm size?--A re-examination in terms of elasticity," Research Policy, Elsevier, vol. 34(6), pages 966-976, August.
    6. Czarnitzki, Dirk & Thorwarth, Susanne, 2012. "Productivity effects of basic research in low-tech and high-tech industries," Research Policy, Elsevier, vol. 41(9), pages 1555-1564.
    7. Zhang, Rui & Sun, Kai & Delgado, Michael S. & Kumbhakar, Subal C., 2012. "Productivity in China's high technology industry: Regional heterogeneity and R&D," Technological Forecasting and Social Change, Elsevier, vol. 79(1), pages 127-141.
    8. Bogliacino, Francesco & Pianta, Mario, 2011. "Engines of growth. Innovation and productivity in industry groups," Structural Change and Economic Dynamics, Elsevier, vol. 22(1), pages 41-53, February.
    9. Wang, David Han-Min & Yu, Tiffany Hui-Kuang & Liu, Hong-Quan, 2013. "Heterogeneous effect of high-tech industrial R&D spending on economic growth," Journal of Business Research, Elsevier, vol. 66(10), pages 1990-1993.
    10. repec:gam:jsusta:v:11:y:2019:i:5:p:1309-:d:210345 is not listed on IDEAS
    11. Raquel Ortega‐Argilés & Mariacristina Piva & Lesley Potters & Marco Vivarelli, 2010. "Is Corporate R&D Investment In High‐Tech Sectors More Effective?," Contemporary Economic Policy, Western Economic Association International, vol. 28(3), pages 353-365, July.
    12. Ortega-Argilés, Raquel & Piva, Mariacristina & Vivarelli, Marco, 2011. "Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?," IZA Discussion Papers 5975, Institute of Labor Economics (IZA).
    13. Harris, Richard & Li, Qian Cher & Trainor, Mary, 2009. "Is a higher rate of R&D tax credit a panacea for low levels of R&D in disadvantaged regions?," Research Policy, Elsevier, vol. 38(1), pages 192-205, February.

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