Accounting for research and productivity growth across industries

L. Rachel Ngai and Roberto Samaniego

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry specific parameters in the production functions for output and knowledge, and in consumer preferences. We find that long run industry differences in both productivity growth and R&D intensity mainly reflect differences in "technological opportunities", interpreted as the parameters of knowledge production. These include the capital intensity of R&D, knowledge spillovers, and diminishing returns to R&D. To investigate the quantitative importance of these factors, we calibrate the model using US industry data. We find that the observed variation in the capital intensity of research cannot account for industry differences in productivity growth rates, and that variation in intertemporal knowledge spillovers has counterfactual predictions for R&D intensity when it is an important factor behind differences in productivity growth rates. This suggests that diminishing returns to research activity is the dominant factor.

JEL-codes: D24 O3 O41 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2009-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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http://eprints.lse.ac.uk/25496/ Open access version. (application/pdf)

Related works:
Journal Article: Accounting for Research and Productivity Growth Across Industries (2011)
Working Paper: Accounting for Research and Productivity Growth Across Industries (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:25496

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