[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/5321.html
   My bibliography  Save this paper

Research and Productivity

Author

Listed:
  • Boyan Jovanovic
  • Yaw Nyarko
Abstract
We model research as a signal on an unknown parameter of a technology. We distinguish applied from basic research and show that firms in the same industry can optimally choose different research portfolios, and that basic research can seem to have a higher rate of return than applied research, even though it really doesn't -- essentially, firms on a 'fast track' upgrading policy opt for basic research but fast and slow-track upgrading policies can coexist in a long-run equilibrium. We also derive the lag structure for how R&D affects the firm's stock of knowledge. To a first approximation, the lags decay geometrically (as is typically assumed in practice) but the rate of decay is endogenous, and depends on how fast the firm is upgrading its technology.

Suggested Citation

  • Boyan Jovanovic & Yaw Nyarko, 1995. "Research and Productivity," NBER Working Papers 5321, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5321
    Note: PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w5321.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    2. Ricardo J. Caballero & Adam B. Jaffe, 1993. "How High Are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth," NBER Chapters, in: NBER Macroeconomics Annual 1993, Volume 8, pages 15-86, National Bureau of Economic Research, Inc.
    3. Zvi Griliches, 1973. "Research Expenditures and Growth Accounting," International Economic Association Series, in: B. R. Williams (ed.), Science and Technology in Economic Growth, chapter 3, pages 59-95, Palgrave Macmillan.
    4. Mansfield, Edwin, 1981. "Composition of R and D Expenditures: Relationship to Size of Firm, Concentration, and Innovative Output," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 610-615, November.
    5. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-1112, December.
    6. Manuel Trajtenberg & Rebecca Henderson & Adam Jaffe, 1992. "Ivory Tower Versus Corporate Lab: An Empirical Study of Basic Research and Appropriability," NBER Working Papers 4146, National Bureau of Economic Research, Inc.
    7. Lichtenberg, Frank R & Siegel, Donald, 1991. "The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 203-229, April.
    8. Sudipto Bhattacharya & Dilip Mookherjee, 1986. "Portfolio Choice in Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 594-605, Winter.
    9. Pakes, Ariel & Schankerman, Mark A., 1978. "The Rate of Obsolescence of Knowledge, Research Gestation Labs, and the Private Rate of Return to Research Resources," Working Papers 78-13, C.V. Starr Center for Applied Economics, New York University.
    10. Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
    11. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December.
    12. Ariel Pakes & Mark Schankerman, 1984. "The Rate of Obsolescence of Patents, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Chapters, in: R&D, Patents, and Productivity, pages 73-88, National Bureau of Economic Research, Inc.
    13. Hall, Bronwyn H., 1989. "TheImpact of Corporate Restructuring On Industrial Research and Development," Department of Economics, Working Paper Series qt7dw7p5dq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    14. Lach, Saul & Schankerman, Mark, 1989. "Dynamics of R&D and Investment in the Scientific Sector," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 880-904, August.
    15. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    16. Oliner, Stephen D, 1996. "New Evidence on the Retirement and Depreciation of Machine Tools," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 57-77, January.
    17. Bronwyn H. Hall, 1990. "The Impact of Corporate Restructuring on Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990 Micr), pages 85-135.
    18. Bahk, Byong-Hong & Gort, Michael, 1993. "Decomposing Learning by Doing in New Plants," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 561-583, August.
    19. Hulten, Charles R. & Wykoff, Frank C., 1981. "The estimation of economic depreciation using vintage asset prices : An application of the Box-Cox power transformation," Journal of Econometrics, Elsevier, vol. 15(3), pages 367-396, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Eric C., 2010. "Determinants of R&D investment: The Extreme-Bounds-Analysis approach applied to 26 OECD countries," Research Policy, Elsevier, vol. 39(1), pages 103-116, February.
    2. Jeroen Klomp & Jacob de Haan, 2010. "Banking risk and regulation: Does one size fit all?," CPB Discussion Paper 164.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Soete, Luc & Verspagen, Bart & ter Weel, Bas, 2010. "Systems of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1159-1180, Elsevier.
    4. Nico van Leeuwen & Arjan Lejour, 2006. "Bilateral FDI Stocks by sector," CPB Memorandum 164.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Machiel Mulder & Victoria Shestalova & Gijsbert Zwart, 2006. "Liberalisation of European energy markets: challenges and policy options," CPB Document 138.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1033-1082, Elsevier.
    2. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna & Guidi, Francesco, 2016. "R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis," Research Policy, Elsevier, vol. 45(10), pages 2069-2086.
    3. Ugur, Mehmet & Guidi, Francesco & Solomon, Edna & Trushin, Eshref, 2014. "R&D investment, productivity and rates of return: A meta-analysis of the evidence on OECD firms and industries," MPRA Paper 59686, University Library of Munich, Germany, revised 22 Oct 2014.
    4. Jacques Mairesse & Mohamed Sassenou, 1991. "R&D Productivity: A Survey of Econometric Studies at the Firm Level," NBER Working Papers 3666, National Bureau of Economic Research, Inc.
    5. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    6. Dirk Czarnitzki & Hanna Hottenrott & Susanne Thorwarth, 2011. "Industrial research versus development investment: the implications of financial constraints," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 527-544.
    7. Zvi Griliches, 1998. "Productivity, R&D, and Basic Research at the Firm Level in the 1970s," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 82-99, National Bureau of Economic Research, Inc.
    8. Ufuk Akcigit & Douglas Hanley & Nicolas Serrano-Velarde, 2021. "Back to Basics: Basic Research Spillovers, Innovation Policy, and Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 1-43.
    9. Czarnitzki, Dirk & Thorwarth, Susanne, 2012. "Productivity effects of basic research in low-tech and high-tech industries," Research Policy, Elsevier, vol. 41(9), pages 1555-1564.
    10. Bhagat, Sanjai & Welch, Ivo, 1995. "Corporate research & development investments international comparisons," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 443-470, April.
    11. Mario Coccia, 2018. "Optimization in R&D intensity and tax on corporate profits for supporting labor productivity of nations," The Journal of Technology Transfer, Springer, vol. 43(3), pages 792-814, June.
    12. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
    13. Raquel Ortega-Argilés, 2013. "R&D, knowledge, economic growth and the transatlantic productivity gap," Chapters, in: Frank Giarratani & Geoffrey J.D. Hewings & Philip McCann (ed.), Handbook of Industry Studies and Economic Geography, chapter 11, pages 271-302, Edward Elgar Publishing.
    14. Per Botolf Maurseth, 2005. "Lovely but dangerous: The impact of patent citations on patent renewal," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(5), pages 351-374.
    15. Michele Cincera, 2005. "Firms' productivity growth and R&D spillovers: An analysis of alternative technological proximity measures," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(8), pages 657-682.
    16. Kokko, Ari & Tingvall, Patrik Gustavsson & Videnord, Josefin, 2015. "The growth effects of R&D spending in the EU: A meta-analysis," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-26.
    17. Czarnitzki, Dirk & Hottenrott, Hanna, 2012. "Collaborative R&D as a strategy to attenuate financing constraints," ZEW Discussion Papers 12-049, ZEW - Leibniz Centre for European Economic Research.
    18. Henkel, Joachim & Rønde, Thomas & Wagner, Marcus, 2015. "And the winner is—Acquired. Entrepreneurship as a contest yielding radical innovations," Research Policy, Elsevier, vol. 44(2), pages 295-310.
    19. Hall, Bronwyn H. & Jaffee, Adam & Trajtenberg, Manuel, 2000. "Market Value and Patent Citations: A First Look," Department of Economics, Working Paper Series qt1rh8k6z2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    20. Jones, Charles I & Williams, John C, 2000. "Too Much of a Good Thing? The Economics of Investment in R&D," Journal of Economic Growth, Springer, vol. 5(1), pages 65-85, March.

    More about this item

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5321. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.