Exploring the Relationship between R&D and Productivity: A Country-Level Study
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2008Metadata
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Bravo Ortega, Claudio
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Exploring the Relationship between R&D and Productivity: A Country-Level Study
Abstract
Research and development (R&D) has been considered a source of
growth in productivity starting from Schultz (1953). Since then,
significant research has studied this relationship at the firm, industry
and country level. However, at the country level, most of the empirical
studies assessing the R&D-productivity relationship often fail to
consider the possible simultaneity of these variables. Do more
productive countries invest more on R&D or does the higher level of
R&D investment lead to higher levels of productivity? Do both
relationships occur at the same time? Using a 65-country panel for the
time period of 1960-2000, this study provides evidence that the
relationship is mainly based on investment in R&D and not the reverse.
In addition, we found that per capita R&D expenditure is strongly
exogenous to productivity. These results suggest that, on average,
those countries making the most effort in the R&D sector will be more
productive in the future. Finally, we present evidence those points out
a strong relationship between R&D and productivity in terms of both
magnitude and significance.
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URI: https://repositorio.uchile.cl/handle/2250/144224
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Series Documentos de Trabajo, No. 282 Junio, 2008
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