Empirical Evidence on R&D Targeting and Transitions

Over the last five decades a growing number of governments in developed and developing countries have implemented targeting policies to increase the R&D to GDP ratio. However, until now there have been few attempts either to evaluate the effectiveness of these policy efforts or to identify the characteristics of substantial, country-level R&D-intensity increases. In this paper we address both of those issues. First, we compile information about the R&D targeting goals for 53 countries, finding that most of them have failed to fulfill their self-imposed targets. Second, and complementarily, we study episodes of substantial acceleration in R&D expenditure, using a larger longitudinal dataset of 62 countries between 1960 and 2007. We find that transitions to higher levels of R&D-intensity are relatively infrequent phenomenon. These transitions are positively correlated with higher income levels, knowledge production variables (patents and scientific publications), intellectual property rights, technological exports, and terms of trade. We also find that the private sector is a main driver of R&D expenditure increases.