Productivity Growth and R&D Expenditure in Taiwan's Manufacturing Firms
This study sets out to estimate the impact of R&D on productivity within the private sector, with further analysis of the different impacts of R&D in high-tech and conventional firms. The study also aims to estimate the rates of return on R&D investment and total factor productivity at firm level. Based on a sample of 136 large manufacturing firms listed on the Taiwan Stock Exchange over the period 1994-2000, our findings suggest that Taiwan's R&D investment had a significant impact on firm productivity growth, with output elasticity standing at around 0.18. When the sample is divided into high-tech and conventional firms, the R&D output elasticity in high-tech firms is significantly greater than that of conventional firms. In addition, the average rate of return in high-tech firms is much larger than that estimated in other industries. Our empirical findings further show that although there was a dramatic decline in TFP in 1998 for all selected industries, this nevertheless started to climb again in 1999.
|Date of creation:||May 2003|
|Date of revision:|
|Publication status:||published as Ito, Takatoshi and Andrew K. Rose (eds.) Growth and productivity in East Asia, NBER--East Asia Seminar on Economics, vol. 13. Chicago and London: University of Chicago Press, 2003.|
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