Effect of publicly and privately financed R&D on total factor productivity growth
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.
Volume (Year): 13 (2000)
Issue (Month): 1 (Spring)
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- 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.
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