Aggregation Effects And Panel Data Estimation Problems: An Investigationof the R&D Intensity Decision
This paper considers why the determinants of the inter- and intra-industry variance in R&D intensity in U.S. manufacturing differ markedly even though response parameters are similar across industries. A similar aggregation effect is noted by Grunfeld and Griliches (1960), and this paper gives that effect operational content in terms of grouped data estimation procedures. Observationally equivalent aggregation results can be generated by errors in variables models (see Aigner and Goldfeld ).A later section considers specifications which identify the empirical importance of both these problems. Finally, a summary of the empirical results on the determinants of R&D intensity is provided.
|Date of creation:||May 1979|
|Date of revision:|
|Publication status:||published as Pakes, Ariel. (1) "On the Asympotic Bias of Wald-Type Estimates of a Straight Line When Both Variables are Subject to Error." Inter. Econ. Rev. June 82, pp. 491-497. (2) "On Group Effects & Errors in Variables in Aggregation ." Rev. of Econ. & Statistics. February 1983, pp. 168-173.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Hausman, Jerry A, 1978.
"Specification Tests in Econometrics,"
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- Michael Gort, 1962. "Diversification and Integration in American Industry," NBER Books, National Bureau of Economic Research, Inc, number gort62-1, March.
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- Aigner, Dennis J & Goldfeld, Stephen M, 1974. "Estimation and Prediction from Aggregate Data when Aggregates are Measured More Accurately than Their Components," Econometrica, Econometric Society, vol. 42(1), pages 113-34, January.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- 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.
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