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R and D and Productivity at the Industry Level: Is There Still a Relationship?

Listed author(s):
  • Zvi Griliches
  • Frank R. Lichtenberg

This paper is a re-examination of the relationship between research and development (R&D) activity and total factor productivity (TFP) at the industry level during the period extending from the early 1960's to the mid-1970's. The data base consists of NSF data on applied R&D expenditures by product class, matched to TFP indices derived from the detailed Census-Penn-SRI manufacturing data file. A hypothesis suggested by previous research on the R&D-productivity relationship is that, due, perhaps, to the depletion of scientific opportunities, the "potency'' of R&D as a source of technological progress has declined in recent years. Our findings indicate, however, that the relationship between an industry's R&D-intensity and its productivity growth did not disappear; if anything, the relationship was stronger in recent years. The overall deceleration in productivity in recent years has affected R&D-intensive industries, but to a lesser extent than it has other industries. What cannot be found in the data is strong evidence of the differential effects of the slowdown in R&D itself. The time series appear to be too noisy and the period too short to detect what the major consequences of the retardation in the growth of R&D expenditures may yet turn out to be.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0850.

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Date of creation: Feb 1982
Publication status: published as Griliches, Zvi and Frank Lichtenberg. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?" R&D, Patents and Productivity, edited by Zvi Griliches. Chicago: University of Chicago Press, (1984). pp. 465-496.
Handle: RePEc:nbr:nberwo:0850
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  1. William D. Nordhaus, 1980. "Policy Responses to the Productivity Slowdown," Cowles Foundation Discussion Papers 555, Cowles Foundation for Research in Economics, Yale University.
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