IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v48y2016i32p2973-2993.html

R&D intensity, economic growth and firm-size growth: theory and practice

Author

Listed:
  • Oscar Afonso

Abstract

This article proposes a theoretical knowledge-driven horizontal research and development (R&D) endogenous-growth model to explain, for 10 innovative countries, the co-movement of the respective R&D intensity, economic growth and firm-size growth, by exploring short-medium-run and long-run growth effects. Bearing in mind some recent literature, we improve the R&D technology, by considering that R&D is more labour intensive through time as complexity increases, that the diffusion of designs is affected by coordination, organizational and transportation costs, and that a potential entrant will come up with the right idea is reduced because of the presence of a larger number of entrants. We show that when the economy is not initially in a steady state, it can take a saddle path towards the unique and locally saddle-path stable interior steady state. Both transitional-dynamics and steady-state behaviours of our theoretical model are then consistent with, respectively, the time-series and the cross-sectional evidence.

Suggested Citation

  • Oscar Afonso, 2016. "R&D intensity, economic growth and firm-size growth: theory and practice," Applied Economics, Taylor & Francis Journals, vol. 48(32), pages 2973-2993, July.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:32:p:2973-2993
    DOI: 10.1080/00036846.2015.1133896
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2015.1133896
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2015.1133896?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ufuk Akcigit, 2009. "Firm Size, Innovation Dynamics and Growth," 2009 Meeting Papers 1267, Society for Economic Dynamics.
    2. Andrea Bassanini & Stefano Scarpetta & Ignazio Visco, 2000. "Knowledge technology and economic growth: recent evidence from OECD countries," Working Paper Research 06, National Bank of Belgium.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shi‐Xiao Wang & Wen‐Min Lu & Shiu‐Wan Hung, 2020. "Improving innovation efficiency of emerging economies: The role of manufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 503-519, June.
    2. Dang, Thang, 2017. "Education as Protection? The Effect of Schooling on Non-Wage Compensation in a Developing Country," MPRA Paper 79223, University Library of Munich, Germany.
    3. Peng, Fei & Anwar, Sajid & Kang, Lili, 2017. "New technology and old institutions: An empirical analysis of the skill-biased demand for older workers in Europe," Economic Modelling, Elsevier, vol. 64(C), pages 1-19.
    4. Syed Ali Raza & Nida Shah & Imtiaz Arif, 2021. "Relationship Between FDI and Economic Growth in the Presence of Good Governance System: Evidence from OECD Countries," Global Business Review, International Management Institute, vol. 22(6), pages 1471-1489, December.
    5. Ningrui Wen & Muhammad Usman & Ahsan Akbar, 2023. "The Nexus between Managerial Overconfidence, Corporate Innovation, and Institutional Effectiveness," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
    6. Óscar Afonso & Ana Maria Bandeira & Manuela Magalhães, 2017. "Effect of the Tax System ON R&D Intensity, Growth, Wages and Consumption Share," Australian Economic Papers, Wiley Blackwell, vol. 56(4), pages 271-291, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Óscar Afonso, 2022. "Growth and wage effects of the monetary policy," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4058-4084, October.
    2. Tahir Mahmood & Kifayat Ullah & Sareer Ahmad, 2024. "Understanding Labour Productivity Convergence: Empirical Evidence from South Asia," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 67(4), pages 957-971, December.
    3. Cigan, Heidi, 2002. "The internet's contribution to progress and growth in Germany: The economic impact of the internet and the price structure of access," HWWA Reports 216, Hamburg Institute of International Economics (HWWA).
    4. Ms. Era Dabla-Norris & Giang Ho & Ms. Annette J Kyobe, 2016. "Structural Reforms and Productivity Growth in Emerging Market and Developing Economies," IMF Working Papers 2016/015, International Monetary Fund.
    5. Boyer, Robert, 2001. "La "nouvelle économie" au futur antérieur : histoire, théories, géographie," CEPREMAP Working Papers (Couverture Orange) 0113, CEPREMAP.
    6. Michael Peneder & Karl Aiginger & Gernot Hutschenreiter & Markus Marterbauer, 2001. "Structural Change and Economic Growth," WIFO Studies, WIFO, number 20668.
    7. Oscar M. Valencia, 2014. "R&D Investment and Financial Frictions," Borradores de Economia 828, Banco de la Republica de Colombia.
    8. Dewi Andriani, 2021. "A critical review of the labor competitiveness as human capital in Indonesia," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(5), pages 52-65, July.
    9. Adam P. Balcerzak & Michal Bernard Pietrzak, 2014. "Are New EU Member States Improving Their Institutional Effectiveness for Global Knowledge-based Economy? TOPSIS Analysis for the Years 2000-2010," Working Papers 16/2014, Institute of Economic Research, revised Nov 2014.
    10. Juan Ignacio Dalmau Porta & Bernardo Javier Pérez Castano & Joan Josep Baixauli I Baixauli, 2007. "Technology Transfer between Research Units and Enterprises. An approach to centred model in the impact on territorial strategic targets," Post-Print halshs-00516132, HAL.
    11. Yi-Ping Tseng & Mark Wooden, 2001. "Enterprise Bargaining and Productivity: Evidence from the Business Longitudinal Survey," Melbourne Institute Working Paper Series wp2001n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    12. Antonelli, Cristiano & Barbiellini Amidei, Federico, 2009. "Knowledge, innovation and localised technological change in Italy, 1950-1990," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200913, University of Turin.
    13. Gianfranco E. Atzeni & OA Carboni, 2006. "Regional Disparity in ICT Adoption: an Empirical Evaluation of The Effects of Subsidies in Italy," Working Paper CRENoS 200608, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    14. Alessandra Colecchia & Paul Schreyer, 2002. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 408-442, April.
    15. Ovais Vohra, 2017. "Innovation as an Economic Driving Force in Australia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(1), pages 1-13, December.
    16. Pedro Rui Mazeda Gil & Paulo Brito & Óscar Afonso, 2008. "A Model of Quality Ladders with Horizontal Entry," FEP Working Papers 296, Universidade do Porto, Faculdade de Economia do Porto.
    17. Ljungwall, Christer & Gustavsson Tingvall, Patrik, 2014. "No. 233 Is China Different? A Meta-Analysis of the Growth-enhancing Effect from R&D Spending in China," Ratio Working Papers 233, The Ratio Institute.
    18. Zheng, Zhijie & Huang, Chien-Yu & Yang, Yibai, 2021. "Inflation And Growth: A Non-Monotonic Relationship In An Innovation-Driven Economy," Macroeconomic Dynamics, Cambridge University Press, vol. 25(5), pages 1199-1226, July.
    19. Alain Quinet, 2002. "The 'New Economy'. The Role of Policies and Institutions," Recherches économiques de Louvain, De Boeck Université, vol. 68(1), pages 257-269.
    20. Scherrer, Christoph, 2001. "New economy: Explosive growth driven by a productivity revolution?," Discussion Papers, Research Unit: Regulation of Work FS II 01-204, WZB Berlin Social Science Center.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:48:y:2016:i:32:p:2973-2993. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.