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Does results and development (R&D) contribute to economic growth in developing countries?

Author

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  • Birdsall, Nancy
  • Rhee, Changyong

Abstract

Using UNESCO data for research and development (R&D) expenditures and personnel, the authors document international differences in R&D activities and assess the determinants of these differences and the link between R&D and economic growth. For a group of OECD countries, R&D activity and economic growth are correlated for one of their two proxies. Contrary to the findings of Romer and Lichtenberg, however, they are not correlated across all (including developing) countries. Moreover, even for OECD countries, it appears likely that economic activity affects R&D activity rather than vice versa. First, there is no evidence that R&D in the OECD in the early years of 1970-85 contributed to growth during the whole period. Second, the analysis of determinants of R&D activities suggests that level of income affects R&D activities; apparently R&D becomes important only after a country reaches a certain stage of development. For developing countries, the authors'results are consistent with the widespread view, first proposed by Gershenkron, that countries that are behind grow by catching up technologically, not by advancing the technological frontier.

Suggested Citation

  • Birdsall, Nancy & Rhee, Changyong, 1993. "Does results and development (R&D) contribute to economic growth in developing countries?," Policy Research Working Paper Series 1221, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1221
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    References listed on IDEAS

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    1. 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.
    2. William Easterly, 1995. "Explaining Miracles: Growth Regressions Meet the Gang of Four," NBER Chapters,in: Growth Theories in Light of the East Asian Experience, NBER-EASE Volume 4, pages 267-299 National Bureau of Economic Research, Inc.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    4. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    5. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-1159, December.
    6. Frank R. Lichtenberg, 1992. "R&D Investment and International Productivity Differences," NBER Working Papers 4161, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Pradhan, Jaya Prakash, 2011. "Regional heterogeneity and firms’ innovation: the role of regional factors in industrial R&D in India," MPRA Paper 28096, University Library of Munich, Germany.
    2. Kenny, Charles & Williams, David, 2001. "What Do We Know About Economic Growth? Or, Why Don't We Know Very Much?," World Development, Elsevier, vol. 29(1), pages 1-22, January.

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