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Exploring the relationship between R&D and productivity in French manufacturing firms

  • Hall, Bronwyn H.
  • Mairesse, Jacques

This paper uses a newly available dataset on the R&D performance of individual French manufacturing firms for the 1980s to replicate and update a series of studies on French R&D and productivity growth at the firm level during the 1970s. The focus of the paper is on the use of a single dataset to evaluate the robustness of the methods commonly used to measure the private returns to R&D. We investigate the consequences of varying specifications and estimations. and in particular that of using different measures of R&D (knowledge) capital and of double counting corrections. Our main findings are the following: first. having a longer history of R&D expenditures helps in predicting the productivity growth of firms, but the choice of depreciation rate for R&D capital makes little difference to the results. Second, the correction for double counting of R&D expenditures in capital and labor is important and converts a measured "excess" rate of returns to a total rate of return to R&D. Third. we show that the direct production function approach to measuring the returns to R&D capital is preferred on several grounds over the rate of returns variation which has been used in the past. Finally, the productivity, of knowledge capital in the production function is uniformly positive, fairly robust, and correlated with permanent firm or industry effects.

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Article provided by Elsevier in its journal Journal of Econometrics.

Volume (Year): 65 (1995)
Issue (Month): 1 (January)
Pages: 263-293

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Handle: RePEc:eee:econom:v:65:y:1995:i:1:p:263-293
Contact details of provider: Web page: http://www.elsevier.com/locate/jeconom

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  1. Bronwyn H. Hall., 1989. "The Impact of Corporate Restructuring on Industrial Research and Development," Economics Working Papers 89-129, University of California at Berkeley.
  2. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
  3. Zvi Griliches & Jacques Mairesse, 1982. "Comparing Productivity Growth: An Exploration of French and U.S. Industrial and Firm Data," NBER Working Papers 0961, National Bureau of Economic Research, Inc.
  4. Zvi Griliches, 1998. "Productivity and R&D at the Firm Level," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 100-133 National Bureau of Economic Research, Inc.
  5. Hall, Bronwyn H., 1993. "The Value of Intangible Corporate Assets: An Empirical Study of the Components of Tobin's Q," Department of Economics, Working Paper Series qt44x548gq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  6. Zvi Griliches, 1998. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 213-240 National Bureau of Economic Research, Inc.
  7. Mohamed Sassenou & Jacques Mairesse, 1989. "Les facteurs qualitatifs de la productivité : un essai d'évaluation," Économie et Prévision, Programme National Persée, vol. 91(5), pages 35-42.
  8. Jacques Mairesse & Zvi Griliches, 1988. "Heterogeneity in Panel Data: Are There Stable Production Functions?," NBER Working Papers 2619, National Bureau of Economic Research, Inc.
  9. Philippe Cuneo & Jacques Mairesse, 1984. "Productivity and R&D at the Firm Level in French Manufacturing," NBER Chapters, in: R&D, Patents, and Productivity, pages 375-392 National Bureau of Economic Research, Inc.
  10. Jacques Mairesse & Philippe Cunéo, 1985. "Recherche-développement et performances des entreprises : une étude économétrique sur données individuelles," Revue Économique, Programme National Persée, vol. 36(5), pages 1001-1042.
  11. Zvi Griliches, 1980. "Returns to Research and Development Expenditures in the Private Sector," NBER Chapters, in: New Developments in Productivity Measurement, pages 419-462 National Bureau of Economic Research, Inc.
  12. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-73, December.
  13. Zvi Griliches & Jacques Mairesse, 1981. "Productivity and R and D at the Firm Level," NBER Working Papers 0826, National Bureau of Economic Research, Inc.
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