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Income Convergence and R&D Intensity in OECD Manufacturing Industries: A Panel Study


  • Nicholas Vasilakos
  • Nikolay Zubanov


This paper evaluates the impact of R&D investment on income convergence for a cross section of manufacturing industries in 12 OECD countries over the time period 1987-1999. We apply dynamic panel estimation techniques to obtain a speed of convergence which, when conditioned to R&D expenditure, is significantly greater than the conventional 2%. In particular, the inclusion of the R&D variable results to a speed of convergence of 7-9% per year, suggesting that convergence is faster between equally technologically advanced industries. A further implication from our results is that differences in the industry mix can be important in explaining the speed of income convergence between countries.

Suggested Citation

  • Nicholas Vasilakos & Nikolay Zubanov, 2009. "Income Convergence and R&D Intensity in OECD Manufacturing Industries: A Panel Study," Discussion Papers 09-09, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:09-09

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    References listed on IDEAS

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    Cited by:

    1. Krasnopjorovs, Olegs, 2013. "Latvijas ekonomikas izaugsmi noteicošie faktori
      [Factors of Economic Growth in Latvia]
      ," MPRA Paper 47550, University Library of Munich, Germany.

    More about this item


    Income growth; beta convergence; R&D investment;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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