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Is Corporate R&D Investment in High-tech Sectors more Efficient? Some Guidelines for European Research Policy

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Abstract

This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data over the period 1987-2002 and on a unique micro longitudinal database consisting of 532 top European R&D investors over the six-year period 2000-2005. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labour productivity; this general result is largely consistent with previous literature in terms of the sign, the significance and the magnitude of the estimated coefficients. More interestingly – both at sectoral and firm levels - the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and it is the main determinant of the productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support the overall capital formation.

Suggested Citation

  • Raquel Ortega-Argilés & Maria-Cristina Piva & Lesley Potters & Marco Vivarelli, 2009. "Is Corporate R&D Investment in High-tech Sectors more Efficient? Some Guidelines for European Research Policy," JRC Working Papers on Corporate R&D and Innovation 2009-9, Joint Research Centre (Seville site).
  • Handle: RePEc:ipt:wpaper:20099
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    File URL: http://iri.jrc.ec.europa.eu/documents/10180/07ee3df3-0053-4933-b8b0-cc02291cbf9d
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    Cited by:

    1. Simachev, Yuri & Kuzyk, Mikhail & Ivanov, Denis, 2012. "Fostering innovation in Russian companies in the post-crisis period: Opportunities and constraints," MPRA Paper 41284, University Library of Munich, Germany.
    2. repec:spr:jknowl:v:8:y:2017:i:3:d:10.1007_s13132-015-0309-9 is not listed on IDEAS
    3. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, Elsevier.
    4. Jarle Møen & Helge Sandvig Thorsen, 2017. "Publication Bias in the Returns to R&D Literature," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(3), pages 987-1013, September.
    5. Yu. Simachev & M. Kuzyk & V. Feygina., 2014. "R&D Cooperation between Russian Firms and Research Organizations: Is There a Need for State Assistance?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.

    More about this item

    Keywords

    R&D; productivity; high-tech sectors; innovation and industrial policy;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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