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

  • Rachel Griffith

    ()

    (Institute for Fiscal Studies and IFS and Manchester)

  • Stephen Redding

    ()

    (Institute for Fiscal Studies and University College London)

  • John Van Reenen

    (Institute for Fiscal Studies)

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.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W00/02.

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Length: 71 pp
Date of creation: 02 Jan 2000
Date of revision:
Handle: RePEc:ifs:ifsewp:00/02
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