International Comparisons of R&D Expenditure: Does an R&D PPP make a difference?
Purchasing power parities (PPPs) for R&D expenditure in 19 manufacturing industries are developed for France, Germany, Japan, the Netherlands and the United Kingdom relative to the United States for the years 1997 and 1987. These PPPs are based on R&D input prices for specific cost categories and differ substantially from current practice of comparing R&D expenditure using GDP PPPs and deflators. After taking into account differences in the relative price of R&D labor and materials, separate PPPs for other R&D cost categories are less essential, and a simpler version using GDP PPPs for these other categories should suffice. Our preferred PPPs are used to compare international R&D costs and intensity. The results suggest that the efforts devoted to R&D in each country are more similar across countries than is apparent using the nominal R&D intensities that are currently the norm.
|Date of creation:||Jul 2003|
|Date of revision:||Jun 2006|
|Publication status:||Published in Ernst R. Berndt and Charles M. Hulten (editors), Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, The University of Chicago Press, Spring 2007.|
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