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European Productivity Gaps Is R&D the Solution?


  • Christoph Meister
  • Bart Verspagen


This paper investigates the potential impact of increased business R&D efforts in Europe on the total factor productivity gap between European and U.S. industry. The paper addresses Europe’s ambition, expressed at the 2000 Lisbon Summit to become “the most competitive and dynamic knowledge-based economy in the world”, and the 3% R&D intensity target for Europe formulated at the 2002 Barcelona Summit. Based on existing empirical models from the literature on productivity and R&D expenditures, we provide projections on the expected productivity impacts of increased R&D in manufacturing industries. The results suggest that raising European R&D is not a complete solution to the European productivity backlog relative to the U.S. We also find that the most dramatic impacts may be expected from raising R&D in so-called low-tech sectors.

Suggested Citation

  • Christoph Meister & Bart Verspagen, 2005. "European Productivity Gaps Is R&D the Solution?," DRUID Working Papers 05-06, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:05-06

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    References listed on IDEAS

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    Cited by:

    1. Ernest Gnan & Jürgen Janger & Johann Scharler, 2004. "Determinants of Long-Term Growth in Austria – A Call for a National Growth Strategy," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 23-46.
    2. López-Pueyo, Carmen & Barcenilla-Visús, Sara & Sanaú, Jaime, 2008. "International R&D spillovers and manufacturing productivity: A panel data analysis," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 152-172, June.
    3. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-72.
    4. DUMONT, Michel, "undated". "Technological performance of Belgium: Is it really so bad?," Working Papers 2006024, University of Antwerp, Faculty of Applied Economics.
    5. Sabine Visser, 2007. "R&D in Worldscan," CPB Memorandum 189, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Van Hemert, Patricia & Nijkamp, Peter, 2008. "Critical Success Factors for a Knowledge-Based Economy: An Empirical Study into Background Factors of Economic Dynamism," Papers DYNREG28, Economic and Social Research Institute (ESRI).

    More about this item


    Technology; Economic growth; R&D; Europe; United States;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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