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Semi-endogenous growth models with domestic and foreign private and public R&D linked to VECMs

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  • Thomas H. W. Ziesemer

Abstract

We present semi-endogenous growth models with productivity as functions of domestic and foreign private and public R&D. In a small country case with a Cobb–Douglas productivity production function, foreign R&D drives steady-state growth and the production function can be a long-term relation in a vector-error-correction model (VECM). Marginal productivity conditions can be long-term relations for a vector-error-correction model if the functional form is of a VES function generalizing a CES function. Combining the marginal products of VES functions with recent evidence from VECMs for five countries shows that private and public R&D have a positive effect on productivity (except for France), and a negative R&D augmenting technical change. In the case of a VES function, steady states with constant R&D/productivity ratios exist only for special cases of parameter restrictions, which are not supported by the evidence.

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  • Thomas H. W. Ziesemer, 2021. "Semi-endogenous growth models with domestic and foreign private and public R&D linked to VECMs," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(6), pages 621-642, August.
    • Handle: RePEc:taf:ecinnt:v:30:y:2021:i:6:p:621-642
    DOI: 10.1080/10438599.2020.1760423
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    1. Thomas H. W. Ziesemer, 2022. "Foreign R&D spillovers to the USA and strategic reactions," Applied Economics, Taylor & Francis Journals, vol. 54(37), pages 4274-4291, August.
    2. Benzaim, Samia & Ftiti, Zied & Khedhaouria, Anis & Djermane, Rebai, 2023. "US foreign investments: Technology transfer, relative backwardness, and the productivity growth of host countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 275-295.
    3. Giovanna Ciaffi & Matteo Deleidi & Stefano Di Bucchianico, 2022. "Stagnation despite ongoing innovation: Is R&D expenditure composition a missing link? An empirical analysis for the US (1948-2019)," Department of Economics University of Siena 877, Department of Economics, University of Siena.
    4. THW Ziesemer, 2020. "Japan’s Productivity and GDP Growth: The Role of Private, Public and Foreign R&D 1967–2017," Economies, MDPI, vol. 8(4), pages 1-25, September.

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    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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