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Beyond the R&D effects on innovation: the contribution of non-R&D activities to TFP growth in the EU

Author

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  • Jesus Lopez-Rodriguez

    (European Commission, Joint Research Centre, Institute for Prospective)

  • Diego Martinez

    (University Pablo Olavide)

Abstract

A significant part of the innovation efforts carried out across very heterogeneous economies in Europe is under the form of Non-R&D innovation activities. But the traditional macro approach to the determinants of TFP does not handle this issue appropiately. This paper has proposed and estimated an augmented macro-theoretical model to the determinants of total factor productivity (TFP) by jointly considering the effects of R&D endowments and the impact of Non-R&D innovation activities on …firms´ levels of productivity. The estimation of the model for a sample of EU26 countries covering the period 2004-2008 shows that the distinction between R&D and Non-R&D endowments really matters for a number of different issues. First, the results show a sizable differential impact of these endowments on TFP growth, being the impact of R&D twice as big as the impact of Non-R&D. Second, absorptive capacity is only linked to R&D endowments. And third, the two types of endowments cannot strictly been seen as complements at least for the case of countries with high R&D intensities or high Non-R&D intensities.

Suggested Citation

  • Jesus Lopez-Rodriguez & Diego Martinez, 2014. "Beyond the R&D effects on innovation: the contribution of non-R&D activities to TFP growth in the EU," Working Papers 2014/16, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2014-16
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    2. Smol, Marzena & Kulczycka, Joanna, 2019. "Towards innovations development in the European raw material sector by evolution of the knowledge triangle," Resources Policy, Elsevier, vol. 62(C), pages 453-462.

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    More about this item

    Keywords

    TFP; R&D; Non-R&D expenditures; EU countries;
    All these keywords.

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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