Measuring the Returns to R&D
62 Pages Posted: 10 Mar 2010
Date Written: January 1, 2010
We review the econometric literature on measuring the returns to R&D. The theoretical frameworks that have been used are outlined, followed by an extensive discussion of measurement and econometric issues that arise when estimating the models. We then provide a series of tables summarizing the major results that have been obtained and conclude with a presentation of R&D spillover returns measurement. In general, the private returns to R&D are strongly positive and somewhat higher than those for ordinary capital, while the social returns are even higher, although variable and imprecisely measured in many cases.
Keywords: returns to R&D, innovation, social returns, spillovers
JEL Classification: O30, O37, C23, C81, D24
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