Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?

24 Pages Posted: 25 Sep 2011

See all articles by Raquel Ortega-Argilés

Raquel Ortega-Argilés

University of Groningen - Faculty of Economics and Business; University of Groningen - RUG

Mariacristina Piva

Universita Cattolica del Sacro Cuore

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano; IZA Institute of Labor Economics

Abstract

The purpose of this study is to investigate the relationship between a firm's R&D expenditures considered as an investment in knowledge, and its productivity, looking at sectoral peculiarities which may emerge; to this end, we use a large unique longitudinal database consisting of 1,809 US and European manufacturing and service firms over the period 1990-2008, for a total of 16,079 observations. Our main findings can be summarised as follows: knowledge stock has a significant positive impact on a firm's productivity, with an overall elasticity of about 0.10; this general result is largely consistent with findings presented in previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient turns out to be significantly larger in the service and high-tech sectors than in the non-high-tech manufacturing sectors. These outcomes suggest that firms in high-tech sectors are still ahead in terms of the impact on productivity of their R&D investments; moreover, a shift in favour of the service sectors seems to emerge.

Keywords: R&D, productivity, knowledge stock, panel data

JEL Classification: O33, L25

Suggested Citation

Ortega-Argiles, Raquel and Piva, Mariacristina and Vivarelli, Marco, Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?. IZA Discussion Paper No. 5975. Available at SSRN: https://ssrn.com/abstract=1933332

Raquel Ortega-Argiles (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

University of Groningen - RUG ( email )

P.O. Box 800
Groningen, 9700 AH
Netherlands

Mariacristina Piva

Universita Cattolica del Sacro Cuore ( email )

Via Emilia Parmense, 84
Piacenza
Italy

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano ( email )

Largo Gemelli 1
Milano, 20123
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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