The Structure of Firm R&D and the Factor Intensity of Production
This paper studies the influence of the structure of firm R&D, industry R&D spillovers, and plant level physical capital on the factor intensity of production. By the structure of firm R&D we mena its distribution across states and products. By factor intensity we mena the cost shares of variable factors, which in this paper are blue collar labor, white collarlabor, and materials. We characterize the effect of the structure of firm R&D on factor intensity using a Translog cost function with quasi-fixed factors. This cost function gives rise to a system of variable cost shares that depends on factor prices, firm and industry R&D, and physical capital. The paper turns to estimation of this system using a sample of plants owned by chemical firms. We find that total firm R&D, industry R&D spillovers, and plant level physical capital are factor biased towards labor as a whole, and factor saving in materials. None of these three factors consistently increase the factor intensity of white collar workers relative to blue collar workers. Since white collar workers are the more skilled of the two grades of labor, none of these factors is strongly associated with skill bias. When we turn to the structure of firm R&D, we find that the strongest effect of firm R&D on the factor intensity of white collar workers occurs when the R&D is conducted in the same product area as the plant. Indeed, the skill bias effect of firm R&D in the same product dominates all other variables, implying that skill bias is technologically 'localized' within firms. All told, the findings suggest that skill bias is governed by portions of the firm's R&D program that are targeted on articular plants, rather than transmitted through capital or by general firm and industry know-how.
|Date of creation:||Jul 1997|
|Publication status:||published as The Review of Economics and Statistics, Vol. 81 (August 1999): 499-510.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
- Paul M Romer, 1999.
"Endogenous Technological Change,"
Levine's Working Paper Archive
2135, David K. Levine.
- Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
- Bronwyn H. Hall & Jacques Mairesse, 1992.
"Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms,"
NBER Working Papers
3956, National Bureau of Economic Research, Inc.
- Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
- Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
- 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.
- Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," Working Papers 88-06, C.V. Starr Center for Applied Economics, New York University.
- Jeffrey I. Bernstein & M. Ishaq Nadiri, 1986. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," NBER Working Papers 2002, National Bureau of Economic Research, Inc.
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
- Adam B. Jaffe, 1986.
"Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value,"
NBER Working Papers
1815, National Bureau of Economic Research, Inc.
- Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
- Jacques Mairesse & Bronwyn H. Hall, 1996. "Estimating the Productivity of Research and Development: An Exploration of GMM Methods Using Data on French & United States Manufacturing Firms," NBER Working Papers 5501, National Bureau of Economic Research, Inc.
- Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
- Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
- Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
- Tor Jakob Klette, 1996. "R&D, Scope Economies, and Plant Performance," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 502-522, Autumn.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:6099. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.