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Endogenous R&D elasticities of productivity functions and BERD bias

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  • Ziesemer, Thomas

    (Mt Economic Research Inst on Innov/Techn, RS: GSBE MORSE)

Abstract

Macroeconomic productivity is modelled as a Cobb-Douglas function of private and public R&D stocks in recent literature. The slope parameters of a growth rate version may change over time and with circumstances. Using the method of functional-coefficient regression, we show that human capital, GDP (per worker), services and defence R&D (both % GDP), lags of domestic and foreign private and public R&D, and lagged labour-augmenting technical change, all in growth rates, change the elasticities of productivity. The result is a panel data set of regression coefficients representing elasticities of productivity. Eventually, the panel average of the productivity elasticities of domestic and foreign private R&D goes to constant values; elasticities of public R&D go down slightly. This may contribute to an explanation of the productivity slowdown and why private R&D has been expanded relative to public R&D in recent years.

Suggested Citation

  • Ziesemer, Thomas, 2025. "Endogenous R&D elasticities of productivity functions and BERD bias," MERIT Working Papers 2025-017, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2025017
    DOI: 10.53330/HGYA6809
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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