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International Comparisons of R&D Expenditure: Does an R&D PPP Make a Difference?

Author

Listed:
  • Sean M. Dougherty
  • Robert Inklaar
  • Robert H. McGuckin
  • Bart van Ark

Abstract

Purchasing power parities (PPPs) for R&D expenditure in 19 manufacturing industries are developed for France, Germany, Japan, the Netherlands and the United Kingdom relative to the United States for the years 1997 and 1987. These PPPs are based on R&D input prices for specific cost categories and differ substantially from current practice of comparing R&D expenditure using GDP PPPs and deflators. After taking into account differences in the relative price of R&D labor and materials, separate PPPs for other R&D cost categories are less essential, and a simpler version using GDP PPPs for these other categories should suffice. Our preferred PPPs are used to compare international R&D costs and intensity. The results suggest that the efforts devoted to R&D in each country are more similar across countries than is apparent using the nominal R&D intensities that are currently the norm.

Suggested Citation

  • Sean M. Dougherty & Robert Inklaar & Robert H. McGuckin & Bart van Ark, 2007. "International Comparisons of R&D Expenditure: Does an R&D PPP Make a Difference?," NBER Working Papers 12829, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12829
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    References listed on IDEAS

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    Cited by:

    1. Jakob Madsen, 2008. "Semi-endogenous versus Schumpeterian growth models: testing the knowledge production function using international data," Journal of Economic Growth, Springer, vol. 13(1), pages 1-26, March.
    2. Stéphane Lhuillery & Julio Raffo & Intan Hamdan-Livramento, 2016. "Measuring creativity: Learning from innovation measurement," WIPO Economic Research Working Papers 31, World Intellectual Property Organization - Economics and Statistics Division.
    3. Evers, Lisa & Spengel, Christoph, 2014. "Effective tax rates under IP tax planning," ZEW Discussion Papers 14-111, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Robert H. McGuckin & Robert Inklaar & Bart van Ark & Sean M. Dougherty, 2004. "The Structure of Business R&D: Recent Trends and Measurement Implications," Economics Program Working Papers 04-01, The Conference Board, Economics Program.
    5. Lisa Evers & Helen Miller & Christoph Spengel, 2015. "Intellectual property box regimes: effective tax rates and tax policy considerations," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 502-530, June.
    6. Gersbach, Hans & Schetter, Ulrich & Schneider, Maik, 2015. "How Much Science? The 5 Ws (and 1 H) of Investing in Basic Research," CEPR Discussion Papers 10482, C.E.P.R. Discussion Papers.
    7. Suen, Richard M.H., 2013. "Research Policy and U.S. Economic Growth," MPRA Paper 49103, University Library of Munich, Germany.
    8. Sabine Visser, 2007. "R&D in Worldscan," CPB Memorandum 189, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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