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Mapping the two faces of R&D: productivity growth in a panel of OECD industries

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Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

  • Stephen Redding

    (Institute for Fiscal Studies and University College London)

  • John Van Reenen

    (Institute for Fiscal Studies)

Abstract

Many writers have claimed that R&D has two 'faces'. In addition to the conventional role of stimulating innovation, R&D enhances technology transfer by improving the ability of firms to learn about advances in the leading edge ('absorptive capacity'). In this paper we document that there has been convergence of TFP within a panel of industries across thirteen OECD countries since 1970. Furthermore, we find evidence that both R&D and human capital appear statistically and economically important in this catch up process as well as stimulating innovation directly. Trade, by contrast, plays a more modest role in productivity growth.

Suggested Citation

  • Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D: productivity growth in a panel of OECD industries," IFS Working Papers W00/02, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:00/02
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    More about this item

    Keywords

    R&D; human capital; Total Factor Productivity; convergence;
    All these keywords.

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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