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A Schumpeter-inspired approach to the construction of R&D capital stocks

  • Jurgen Bitzer
  • Andreas Stephan

A new method for constructing R&D capital stocks is proposed and tested. Following Schumpeter, the development of R&D capital stocks is modelled as a process of creative destruction. Newly generated knowledge is assumed not only to add to the existing R&D capital stocks but also, by displacing old knowledge, to destroy part of that capital. This is in stark contrast to the perpetual inventory method, which postulates a constant rate of depreciation. We compare both methods by estimating the impact of R&D and spillovers on output of 9 industries in 12 OECD countries, and find that the new approach leads to more sensible and robust results.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 39 (2007)
Issue (Month): 2 ()
Pages: 179-189

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Handle: RePEc:taf:applec:v:39:y:2007:i:2:p:179-189
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  1. Wolfgang Keller, 1996. "Are International R&D Spillovers Trade-related? Analyzing Spillovers among Randomly Matched Trade Partners," International Trade 9608002, EconWPA.
  2. Keller, Wolfgang, 2001. "The geography and channels of diffusion at the world's technology frontier," HWWA Discussion Papers 123, Hamburg Institute of International Economics (HWWA).
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  12. Edmond, Chris, 2001. "Some Panel Cointegration Models of International R&D Spillovers," Journal of Macroeconomics, Elsevier, vol. 23(2), pages 241-260, April.
  13. Keller, Wolfgang, 1997. "How trade patterns and technology flows affect productivity growth," Policy Research Working Paper Series 1831, The World Bank.
  14. Bart Verspagen, 1997. "Measuring Intersectoral Technology Spillovers: Estimates from the European and US Patent Office Databases," Economic Systems Research, Taylor & Francis Journals, vol. 9(1), pages 47-65.
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  18. Nestor Terleckyj, 1980. "Direct and Indirect Effects of Industrial Research and Development on the Productivity Growth of Industries," NBER Chapters, in: New Developments in Productivity Measurement, pages 357-386 National Bureau of Economic Research, Inc.
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