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A Schumpeter-Inspired Approach to the Construction of R&D Capital Stocks

  • Jürgen Bitzer
  • Andreas Stephan

A new method for constructing R&D capital stocks is proposed. Following Schumpeter, the development of R&D capital stocks is modelled as a process of creative destruction. Newly generated knowledge is assumed not only to add to the existing R&D capital stocks but also, by displacing old knowledge, to destroy part of that capital. This is in stark contrast to the perpetual inventory method, which postulates a constant rate of depreciation. We compare both methods by estimating the impact of R&D and spillovers on output in OECD countries, and find that the new approach leads to more sensible and robust results.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.38579.de/dp300.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 300.

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Length: 19 p.
Date of creation: 2002
Date of revision:
Handle: RePEc:diw:diwwpp:dp300
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  1. Chihwa Kao & Min-Hsien Chiang & Bangtian Chen, 1999. "International R&D Spillovers: An Application of Estimation and Inference in Panel Cointegration," Center for Policy Research Working Papers 4, Center for Policy Research, Maxwell School, Syracuse University.
  2. Keller, Wolfgang, 2000. "Do Trade Patterns and Technology Flows Affect Productivity Growth?," World Bank Economic Review, World Bank Group, vol. 14(1), pages 17-47, January.
  3. Zvi Griliches, 1991. "The Search for R&D Spillovers," NBER Working Papers 3768, National Bureau of Economic Research, Inc.
  4. Jürgen Bitzer, 2005. "Measuring Knowledge Stocks: A Process of Creative Destruction," Kyklos, Wiley Blackwell, vol. 58(3), pages 379-393, 07.
  5. Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66, pages 419.
  6. Bart Verspagen, 1997. "Estimating international technology spillovers using technology flow matrices," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(2), pages 226-248, 06.
  7. Bart Verspagen, 1997. "Measuring Intersectoral Technology Spillovers: Estimates from the European and US Patent Office Databases," Economic Systems Research, Taylor & Francis Journals, vol. 9(1), pages 47-65.
  8. Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
  9. Bronwyn H. Hall & Jacques Mairesse, 1992. "Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms," NBER Working Papers 3956, National Bureau of Economic Research, Inc.
  10. Roberto ESPOSTI & Pierpaolo PIERANI, 2001. "Building the Knowledge Stock: Lags, Depreciation and Uncertainty in Agricultural R&D," Working Papers 145, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  11. Wolfgang Keller, 1997. "Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners," NBER Working Papers 6065, National Bureau of Economic Research, Inc.
  12. Wolfgang Keller, 2001. "The Geography and Channels of Diffusion at the World's Technology Frontier," NBER Working Papers 8150, National Bureau of Economic Research, Inc.
  13. Nadiri, M Ishaq & Prucha, Ingmar R, 1996. "Estimation of the Depreciation Rate of Physical and R&D Capital in the U.S. Total Manufacturing Sector," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 43-56, January.
  14. Edmond, Chris, 2001. "Some Panel Cointegration Models of International R&D Spillovers," Journal of Macroeconomics, Elsevier, vol. 23(2), pages 241-260, April.
  15. Jungsoo Park, 2004. "International and Intersectoral R&D Spillovers in the OECD and East Asian Economies," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 739-757, October.
  16. ZELLNER, Arnold & KMENTA, Jan & DREZE, Jacques H., . "Specification and estimation of Cobb-Douglas production function models," CORE Discussion Papers RP -12, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  17. Nestor Terleckyj, 1980. "Direct and Indirect Effects of Industrial Research and Development on the Productivity Growth of Industries," NBER Chapters, in: New Developments in Productivity Measurement, pages 357-386 National Bureau of Economic Research, Inc.
  18. Vincenzo Atella & Beniamino Quintieri, 2001. "Do R&D expenditures really matter for TFP?," Applied Economics, Taylor & Francis Journals, vol. 33(11), pages 1385-1389.
  19. Elhanan Helpman & David T. Coe, 1993. "International RandD Spillovers," IMF Working Papers 93/84, International Monetary Fund.
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