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Accounting for Research and Productivity Growth Across Industries

Author

Listed:
  • 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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    More about this item

    Keywords

    Multi-sector growth; Total factor productivity; R&D intensity; Technological opportunity;
    All these keywords.

    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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