IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2901.html
   My bibliography  Save this paper

The Impact of R&D Investment On Productivity - New Evidence Using Linked R&D-LRD Data

Author

Listed:
  • Frank R. Lichtenberg
  • Donald Siegel

Abstract

This paper uses confidential Census longitudinal microdata to examine the association between R&D and productivity for the period 1972.1985. These data allow for significant improvements in measurement and model specification, yielding more precise estimates of the returns to R&D. Our results confirm the findings of existing studies: 1) positive returns to R&D investment 2) higher returns to company-financed research 3) a productivity "premium" on basic research These results are robust to our attempts to adjust for "influential" outliers. Also, it appears that the return to company-financed R&D (but not total R&D) is an increasing function of firm size.

Suggested Citation

  • Frank R. Lichtenberg & Donald Siegel, 1989. "The Impact of R&D Investment On Productivity - New Evidence Using Linked R&D-LRD Data," NBER Working Papers 2901, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2901
    Note: PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2901.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. William D. Nordhaus, 1980. "Policy Responses to the Productivity Slowdown," Cowles Foundation Discussion Papers 555, Cowles Foundation for Research in Economics, Yale University.
    2. Zvi Griliches, 1984. "R&D, Patents, and Productivity," NBER Books, National Bureau of Economic Research, Inc, number gril84-1.
    3. Zvi Griliches, 1998. "Productivity Growth and R&D at the Business Level: Results from the PIMS Data Base," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 134-156, National Bureau of Economic Research, Inc.
    4. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    5. Cohen, Wesley M & Levin, Richard C & Mowery, David C, 1987. "Firm Size and R&D Intensity: A Re-examination," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 543-565, June.
    6. Minasian, Jora R, 1969. "Research and Development, Production Functions, and Rates of Return," American Economic Review, American Economic Association, vol. 59(2), pages 80-85, May.
    7. James L. Monahan & Frank M. Gollop, 1986. "From Homogeneity to Heterogeneity: An Index of Diversification," Boston College Working Papers in Economics 129, Boston College Department of Economics.
    8. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    9. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-1112, December.
    10. Wesley M. Cohen & Richard C. Levin & David C. Mowery, 1987. "Firm Size and R&D Intensity: A Re-Examination," NBER Working Papers 2205, National Bureau of Economic Research, Inc.
    11. Stern, Robert M & Baum, Christopher F & Greene, Mark N, 1979. "Evidence on Structural Change in the Demand for Aggregate U.S. Imports and Exports," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 179-192, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giuseppe Medda & Claudio Piga, 2014. "Technological spillovers and productivity in Italian manufacturing firms," Journal of Productivity Analysis, Springer, vol. 41(3), pages 419-434, June.
    2. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna & Guidi, Francesco, 2016. "R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis," Research Policy, Elsevier, vol. 45(10), pages 2069-2086.
    3. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1033-1082, Elsevier.
    4. M. Ishaq Nadiri, 1993. "Innovations and Technological Spillovers," NBER Working Papers 4423, National Bureau of Economic Research, Inc.
    5. Ugur, Mehmet & Guidi, Francesco & Solomon, Edna & Trushin, Eshref, 2014. "R&D investment, productivity and rates of return: A meta-analysis of the evidence on OECD firms and industries," MPRA Paper 59686, University Library of Munich, Germany, revised 22 Oct 2014.
    6. Raquel Ortega-Argilés, 2013. "R&D, knowledge, economic growth and the transatlantic productivity gap," Chapters, in: Frank Giarratani & Geoffrey J.D. Hewings & Philip McCann (ed.), Handbook of Industry Studies and Economic Geography, chapter 11, pages 271-302, Edward Elgar Publishing.
    7. Jacques Mairesse & Mohamed Sassenou, 1991. "R&D Productivity: A Survey of Econometric Studies at the Firm Level," NBER Working Papers 3666, National Bureau of Economic Research, Inc.
    8. Choi, Mincheol & Lee, Chang-Yang, 2021. "Technological diversification and R&D productivity: The moderating effects of knowledge spillovers and core-technology competence," Technovation, Elsevier, vol. 104(C).
    9. Nelson, Richard R. & Wolff, Edward N., 1997. "Factors behind cross-industry differences in technical progress," Structural Change and Economic Dynamics, Elsevier, vol. 8(2), pages 205-220, June.
    10. Konstantinos Konstantakis & Panayotis G. Michaelides & Theofanis Papageorgiou, 2014. "Sector size, technical change and stability in the USA (1957-2006): a Schumpeterian approach," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 41(10), pages 956-974, October.
    11. Thirtle, Colin, 1986. "The Production Function Approach to the Relationship Between Productivity Growth and R & D," Manchester Working Papers in Agricultural Economics 232791, University of Manchester, School of Economics, Agricultural Economics Department.
    12. Alfranca, Óscar & Diaz-Balteiro, Luis & Herruzo, A. Casimiro, 2009. "Technical innovation in Spain's wood-based industry: The role of environmental and quality strategies," Forest Policy and Economics, Elsevier, vol. 11(3), pages 161-168, May.
    13. Czarnitzki, Dirk & Thorwarth, Susanne, 2012. "Productivity effects of basic research in low-tech and high-tech industries," Research Policy, Elsevier, vol. 41(9), pages 1555-1564.
    14. Steven G. Allen, 1987. "Productivity Levels and Productivity Change Under Unionism," NBER Working Papers 2304, National Bureau of Economic Research, Inc.
    15. Valdemar Smith & Mogens Dilling-Hansen & Tor Eriksson & Erik Strøjer Madsen, 2004. "R&D and productivity in Danish firms: some empirical evidence," Applied Economics, Taylor & Francis Journals, vol. 36(16), pages 1797-1806.
    16. Robert Wieser, 2005. "Research And Development Productivity And Spillovers: Empirical Evidence At The Firm Level," Journal of Economic Surveys, Wiley Blackwell, vol. 19(4), pages 587-621, September.
    17. Jarle Møen & Helge Sandvig Thorsen, 2017. "Publication Bias in the Returns to R&D Literature," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(3), pages 987-1013, September.
    18. Chia Lin, CHANG & Stephane, ROBIN, 2004. "Doing R&D and Importing Technology : an Empirical Investigation on Taiwan’s manufacturing firms," LIDAM Discussion Papers IRES 2004006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    19. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    20. Hall, Michael J. & Layson, Stephen K. & Link, Albert N., 2013. "The Division of Policy Research and Analysis at the National Science Foundation: Its Support of Research on the Returns to R&D," UNCG Economics Working Papers 13-6, University of North Carolina at Greensboro, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2901. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.