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Semi-endogenous growth models with domestic and foreign private and public R&D linked to VECMs with evidence for five countries

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  • Ziesemer, Thomas

    (UNU-MERIT, Maastricht University)

Abstract

We present semi-endogenous growth models with productivity as functions of domestic and foreign private and public R&D. In a small country case with a Cobb-Douglas productivity production function, foreign R&D drives steady-state growth and the production function can be a long-term relation in a vector-error-correction model (VECM). Marginal productivity conditions can be long-term relations for a vector-error-correction model if the functional form is of a VES function generalising a CES function. Combining the marginal products of VES functions with recent evidence from VECMs for five countries shows that private and public R&D have a positive effect on productivity (except for France), and a negative R&D augmenting technical change. In case of a VES function, steady states with constant R&D/productivity ratios exist only for special cases of parameter restrictions, which are not supported by the evidence.

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  • Ziesemer, Thomas, 2020. "Semi-endogenous growth models with domestic and foreign private and public R&D linked to VECMs with evidence for five countries," MERIT Working Papers 2020-013, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2020013
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    More about this item

    Keywords

    Productivity; endogenous (un)balanced growth; public R&D expenditure; foreign spillover;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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