Productivity Effects of Basic Research in Low-Tech and High-Tech Industries

33 Pages Posted: 20 Apr 2012

See all articles by Dirk Czarnitzki

Dirk Czarnitzki

KU Leuven - Department of Managerial Economics, Strategy, and Innovation; Centre for European Economic Research (ZEW)

Susanne Thorwarth

Monopolies Commission

Multiple version iconThere are 2 versions of this paper

Date Written: April 20, 2012

Abstract

R&D encompasses plenty of activities which are usually summarized under the terms of basic research, applied research and development. Although basic research is often associated with low appropriability it provides the fundamental basis for subsequent applied research and development. Especially in the high-tech sector basic research capabilities are an essential component for a firm's success. We use firm-level panel data stemming from Belgian R&D surveys and apply a production function approach which shows that basic research exhibits a premium on a firm's output when compared to applied research and development. When we split the sample into high-tech and low-tech companies, we find a large premium of basic research for firms in high-tech industries, but no premium in low-tech sectors.

Keywords: Basic Research, R&D, Production Function Estimation

JEL Classification: L23, O30, O33

Suggested Citation

Czarnitzki, Dirk and Thorwarth, Susanne, Productivity Effects of Basic Research in Low-Tech and High-Tech Industries (April 20, 2012). ZEW - Centre for European Economic Research Discussion Paper No. 12-027, Available at SSRN: https://ssrn.com/abstract=2043018 or http://dx.doi.org/10.2139/ssrn.2043018

Dirk Czarnitzki (Contact Author)

KU Leuven - Department of Managerial Economics, Strategy, and Innovation ( email )

Naamsestraat 69 bus 3500
Leuven, 3000
Belgium

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
Mannheim, 68034
Germany

Susanne Thorwarth

Monopolies Commission ( email )

Adenauerallee 133
Bonn, 53113
Germany

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