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Effect of publicly and privately financed R&D on total factor productivity growth

Author

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  • Petri Niininen

    (VTT Group for Technology Studies, Finland)

Abstract

The effects of privately and publicly financed R&D on total factor productivity growth are examined. Total factor productivity (TFP) is decomposed into markup, exogenous demand, factor price, and publicly and privately financed R&D effects at the industry level. The constructed dataset consists of 11 Finnish manufacturing industries in 1975–1993. The results suggest that both privately and publicly financed R&D has a considerable effect on the TFP rate of growth but R&D explains only part of the technical progress. On the average, total R&D accounted for about 9 percent of the TFP rate of growth in manufacturing industries while one fourth of the growth could be attributed to the residual technical change. Exogenous demand effect was the biggest component, accounting almost for one third of the TFP rate of growth.

Suggested Citation

  • Petri Niininen, 2000. "Effect of publicly and privately financed R&D on total factor productivity growth," Finnish Economic Papers, Finnish Economic Association, vol. 13(1), pages 56-68, Spring.
  • Handle: RePEc:fep:journl:v:13:y:2000:i:1:p:56-68
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    File URL: http://www.taloustieteellinenyhdistys.fi/images/stories/fep/f2000_1e.pdf
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    References listed on IDEAS

    as
    1. Zvi Griliches, 1998. "Returns to Research and Development Expenditures in the Private Sector," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 49-81 National Bureau of Economic Research, Inc.
    2. Nadiri, Ishaq M. & Mamuneas, T.P., 1994. "Infrastructure and Pulbic R&D Investments, and the Growth of Factor Productivity in U.S. Manufacturing Industries," Working Papers 94-26, C.V. Starr Center for Applied Economics, New York University.
    3. M. Ishaq Nadiri & Theofanis P. Mamuneas, 1994. "Infrastructure and Public R&D Investments, and the Growth of Factor Productivity in US Manufacturing Industries," NBER Working Papers 4845, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Juana Sanchez, 2014. "Non-technological and Mixed Modes of Innovation in the United States. Evidence from the Business Research and Development and Innovation Survey, 2008-2011," Working Papers 14-35, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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