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Accounting for Research and Productivity Growth Across Industries

Author

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  • Rachel Ngai

    (London School of Economics)

  • Roberto Samaniego

    (George Washington University)

Abstract

What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry-specific parameters in the production functions for output and knowledge, and in consumer preferences. We find that long run industry differences in both productivity growth and R&D intensity mainly reflect differences in "technological opportunities", interpreted as the parameters of knowledge production. These include the capital intensity of R&D, knowledge spillovers, and diminishing returns to R&D. To investigate the quantitative importance of these factors, we calibrate the model using US industry data. We find that diminishing returns to research activity is the dominant factor. (Copyright: Elsevier)

Suggested Citation

  • Rachel Ngai & Roberto Samaniego, 2011. "Accounting for Research and Productivity Growth Across Industries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 475-495, July.
  • Handle: RePEc:red:issued:09-126 DOI: 10.1016/j.red.2009.12.002
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Samaniego, Roberto M., 2013. "Knowledge spillovers and intellectual property rights," International Journal of Industrial Organization, Elsevier, vol. 31(1), pages 50-63.
    2. Roberto Samaniego & Juliana Sun, 2016. "Productivity Growth and Structural Transformation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 266-285, July.
    3. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.
    4. Rachel Ngai & Roberto Samaniego, 2011. "Accounting for Research and Productivity Growth Across Industries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 475-495, July.
    5. Zheng, Jianghuai & Zhang, Lili & Wang, Yu, 2010. "The underdevelopment of service industry in China: an empirical study of cities in Yangtze River Delta," MPRA Paper 33125, University Library of Munich, Germany, revised Jun 2011.
    6. Roberto Samaniego & Anna Ilyina, 2009. "A Multi-industry Model of Growth with Financing Constraints," 2009 Meeting Papers 467, Society for Economic Dynamics.
    7. Jianghuai Zheng & Lili Zhang & Yu Wang, 2011. "The underdevelopment of service industry in china: An empirical study of cities in Yangtze River Delta," Frontiers of Economics in China, Springer;Higher Education Press, pages 413-446.
    8. Claudio Baccianti & Andreas Löschel, 2014. "The Role of Product and Process Innovation in CGE Models of Environmental Policy," WWWforEurope Working Papers series 68, WWWforEurope.
    9. Huang, Chien-Yu & Ji, Lei, 2013. "Knowledge-intensive business services and economic growth with endogenous market structure," Journal of Macroeconomics, Elsevier, pages 95-106.
    10. Ilyina, Anna & Samaniego, Roberto, 2012. "Structural change and financing constraints," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 166-179.
    11. Stijepic, Denis & Wagner, Helmut, 2011. "Implementation of technological breakthroughs at sector level and the technology-bias," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48707, Verein für Socialpolitik / German Economic Association.
    12. Barbosa, Natália & Faria, Ana Paula, 2011. "Innovation across Europe: How important are institutional differences?," Research Policy, Elsevier, pages 1157-1169.
    13. Angus Chu, 2010. "Effects of patent length on R&D: a quantitative DGE analysis," Journal of Economics, Springer, pages 117-140.
    14. Navas, Antonio, 2015. "Trade liberalisation and innovation under sector heterogeneity," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 42-62.
    15. Chen, Jong-Rong & Chu, Yun-Peng & Ou, Yi-Pey & Yang, Chih-Hai, 2015. "R&D specialization and manufacturing productivity growth: A cross-country study," Japan and the World Economy, Elsevier, vol. 34, pages 33-43.
    16. Aiello, Francesco & Pupo, Valeria & Ricotta, Fernanda, 2013. "Firm heterogeneity in TFP, sectoral innovation and geography. Evidence from Italy," MPRA Paper 48573, University Library of Munich, Germany.
    17. Belal N. Fallah & Mark D. Partridge & M. Rose Olfert, 2011. "Urban sprawl and productivity: Evidence from US metropolitan areas," Papers in Regional Science, Wiley Blackwell, vol. 90(3), pages 451-472, August.
    18. Venturini, Francesco, 2012. "Looking into the black box of Schumpeterian growth theories: An empirical assessment of R&D races," European Economic Review, Elsevier, vol. 56(8), pages 1530-1545.
    19. repec:spr:joecth:v:65:y:2018:i:1:d:10.1007_s00199-016-1012-1 is not listed on IDEAS
    20. Lei Ji, 2013. "Cross-industry tfp growth differences with asymmetric industries and the endogenous market structure," Documents de Travail de l'OFCE 2013-17, Observatoire Francais des Conjonctures Economiques (OFCE).
    21. John Inekwe, 2015. "The Contribution of R&D Expenditure to Economic Growth in Developing Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, pages 727-745.
    22. Roberto Samaniego, 2013. "Stages of Diversification and Industry Productivity Differences," 2013 Meeting Papers 774, Society for Economic Dynamics.

    More about this item

    Keywords

    Multi-sector growth; Total factor productivity; R&D intensity; Technological opportunity;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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