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Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?

  • Ortega-Argilés, Raquel


    (IN+ Center for Innovation)

  • Piva, Mariacristina


    (Università Cattolica del Sacro Cuore)

  • Vivarelli, Marco


    (Università Cattolica del Sacro Cuore)

The purpose of this study is to investigate the relationship between a firm's R&D expenditures considered as an investment in knowledge, and its productivity, looking at sectoral peculiarities which may emerge; to this end, we use a large unique longitudinal database consisting of 1,809 US and European manufacturing and service firms over the period 1990-2008, for a total of 16,079 observations. Our main findings can be summarised as follows: knowledge stock has a significant positive impact on a firm's productivity, with an overall elasticity of about 0.10; this general result is largely consistent with findings presented in previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient turns out to be significantly larger in the service and high-tech sectors than in the non-high-tech manufacturing sectors. These outcomes suggest that firms in high-tech sectors are still ahead in terms of the impact on productivity of their R&D investments; moreover, a shift in favour of the service sectors seems to emerge.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5975.

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Length: 24 pages
Date of creation: Sep 2011
Date of revision:
Publication status: published in: Economics of Innovation and New Technology, 2015, 24(3), 204-222
Handle: RePEc:iza:izadps:dp5975
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  1. Andrea Conte & Marco Vivarelli, 2006. "One or Many Knowlede Production Functions? Mapping Innovative Activity Using Microdata," Papers on Entrepreneurship, Growth and Public Policy 2006-03, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  2. Sirilli, Giorgio & Evangelista, Rinaldo, 1998. "Technological innovation in services and manufacturing: results from Italian surveys," Research Policy, Elsevier, vol. 27(9), pages 881-899, December.
  3. Bronwyn H. Hall, 2010. "Measuring the Returns to R&D: The Depreciation Problem," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 341-381 National Bureau of Economic Research, Inc.
  4. Aghion, Philippe & Howitt, Peter, 1996. "The Observational Implications of Schumpeterian Growth Theory," Empirical Economics, Springer, vol. 21(1), pages 13-25.
  5. Janz, Norbert & Lööf, Hans & Peters, Bettina, 2004. "Firm Level Innovation and Productivity - Is there a Common Story Across Countries?," Working Paper Series in Economics and Institutions of Innovation 24, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  6. Lööf, Hans & Heshmati, Almas, 2001. "On the Relationship between Innovation and Performance: A sensitivity Analysis," SSE/EFI Working Paper Series in Economics and Finance 0446, Stockholm School of Economics, revised 01 Oct 2001.
  7. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring.
  8. Mairesse,Jacques & Mohnen,Pierre, 2004. "The Importance of R&D for Innovation: A Reassessment Using French Survey Data," Research Memorandum 022, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  9. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
  10. Jakob Klette & Samuel Kortum, 2002. "Innovating firms and aggregate innovation," Staff Report 300, Federal Reserve Bank of Minneapolis.
  11. Raquel Ortega-Argilés & Mariacristina Piva & Lesley Potters & Marco Vivarelli, 2010. "Is Corporate R&D Investment In High-Tech Sectors More Effective?," Contemporary Economic Policy, Western Economic Association International, vol. 28(3), pages 353-365, 07.
  12. Philippe Cuneo & Jacques Mairesse, 1983. "Productivity and R&D at the Firm Level in French Manufacturing," NBER Working Papers 1068, National Bureau of Economic Research, Inc.
  13. Agustí Segarra & Mercedes Teruel, 2011. "Productivity and R&D sources: evidence for Catalan firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(8), pages 727-748, September.
  14. Greenhalgh, C & Longland, M & Bosworth, D, 2001. "Technological Activity and Employment in a Panel of UK Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(3), pages 260-82, August.
  15. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
  16. Lichtenberg, Frank R & Siegel, Donald, 1991. "The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 203-29, April.
  17. Bruno Crépon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation and Productivity : An Econometric Analysis at the Firm Level," Working Papers 98-33, Centre de Recherche en Economie et Statistique.
  18. Thomas Hatzichronoglou, 1997. "Revision of the High-Technology Sector and Product Classification," OECD Science, Technology and Industry Working Papers 1997/2, OECD Publishing.
  19. Agusti Segarra-Blasco, 2010. "Innovation and productivity in manufacturing and service firms in Catalonia: a regional approach," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(3), pages 233-258.
  20. Kuen-Hung Tsai & Jiann-Chyuan Wang, 2004. "R&D Productivity and the Spillover Effects of High-tech Industry on the Traditional Manufacturing Sector: The Case of Taiwan," The World Economy, Wiley Blackwell, vol. 27(10), pages 1555-1570, November.
  21. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  22. Dosi, Giovanni, 1997. "Opportunities, Incentives and the Collective Patterns of Technological Change," Economic Journal, Royal Economic Society, vol. 107(444), pages 1530-47, September.
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  27. repec:crs:wpaper:9833 is not listed on IDEAS
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