A Causal Analysis of the R&D Interactions between the EU and the US
This paper examines the relationships between the aggregate R&D activities of the EU and the US using multivariate Granger-causality tests. Our estimation results indicate that the EU reacts positively to increases in R&D productivity in the US. On the other hand, R&D activity in the EU is a direct Granger-cause of both R&D and labour productivity in the US, and the effects are negative. It was shown in the literature that the US reacts submissively to successful Japanese R&D. We extend the literature by demonstrating that the US also reacts submissively to increased R&D effort in the EU.
Volume (Year): 7 (2007)
Issue (Month): 4 (December)
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