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Spillovers, Linkages, and Productivity Growth in the US Economy, 1958 to 2007


  • Edward N. Wolff


I speculate that technological spillover effects may have become more important over time as IT penetrated the U.S. economy. The rationale is that IT may speed up the process of knowledge transfer and make these knowledge spillovers more effective. Using US input-output tables for years 1958, 1967, 1977, 1987, 1997, and 2007, I compare my new results with Wolff and Nadiri (1993) covering years 1947-1977 and Wolff (1997) covering 1958- 1987. I estimate that the direct rate of return to R&D is now 22% and the indirect rate of return to R&D is 37%. The former is higher than in the previous studies. The indirect rate of return to R&D is now significant at the one percent level, in comparison to a 10 percent significance level in Wolff (1997). The newly estimated social rate of return to R&D is 59%, compared to 53% in Wolff (1997). In contrast to the earlier studies, the coefficients of R&D embodied in new investment are now statistically significant at the five percent level. Separate regressions on the 1958-1987 and 1987-2007 periods and the addition of successive periods to the sample also suggest a strengthening of R&D spillovers between the 1958-1987 and 1987-2007 periods. A decomposition of TFP growth also indicates a higher contribution from R&D spillovers in the later period. These results suggest a strengthening of the R&D spillover effect over time.

Suggested Citation

  • Edward N. Wolff, 2011. "Spillovers, Linkages, and Productivity Growth in the US Economy, 1958 to 2007," NBER Working Papers 16864, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16864
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    References listed on IDEAS

    1. Pieter Kop Jansen & Thijs ten Raa, 2009. "The Choice of Model in the Construction of Input–Output Coefficients Matrices," World Scientific Book Chapters,in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 4, pages 47-66 World Scientific Publishing Co. Pte. Ltd..
    2. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1989. "Research and Development and Intra-industry Spillovers: An Empirical Application of Dynamic Duality," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 249-267.
    3. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    4. Eric J. Bartelsman & Ricardo J. Caballero & Richard K. Lyons, 1991. "Short and Long Run Externalities," NBER Working Papers 3810, National Bureau of Economic Research, Inc.
    5. Madsen, Jakob B., 2007. "Technology spillover through trade and TFP convergence: 135 years of evidence for the OECD countries," Journal of International Economics, Elsevier, vol. 72(2), pages 464-480, July.
    6. Ornaghi, Carmine, 2006. "Spillovers in product and process innovation: Evidence from manufacturing firms," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 349-380, March.
    7. Sergey Lychagin & Joris Pinkse & Margaret E. Slade & John Van Reenen, 2016. "Spillovers in Space: Does Geography Matter?," Journal of Industrial Economics, Wiley Blackwell, vol. 64(2), pages 295-335, June.
    8. Wolff, Edward N. & Ishaq Nadiri, M., 1993. "Spillover effects, linkage structure, and research and development," Structural Change and Economic Dynamics, Elsevier, vol. 4(2), pages 315-331, December.
    9. Bart Verspagen, 1997. "Estimating international technology spillovers using technology flow matrices," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(2), pages 226-248, June.
    10. Edward Wolff, 1997. "Spillovers, Linkages and Technical Change," Economic Systems Research, Taylor & Francis Journals, vol. 9(1), pages 9-23.
    11. Acharya, Ram C. & Keller, Wolfgang, 2008. "Estimating the Productivity Selection and Technology Spillover Effects of Imports," CEPR Discussion Papers 6860, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Nicola Gennaioli & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2013. "Human Capital and Regional Development," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 105-164.

    More about this item

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • 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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