R and D and Productivity at the Industry Level: Is There Still a Relationship?

52 Pages Posted: 14 Jul 2000 Last revised: 14 May 2008

See all articles by Zvi Griliches

Zvi Griliches

(Deceased)

Frank R. Lichtenberg

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: February 1982

Abstract

This paper is a re-examination of the relationship between research and development (R&D) activity and total factor productivity (TFP) at the industry level during the period extending from the early 1960's to the mid-1970's. The data base consists of NSF data on applied R&D expenditures by product class, matched to TFP indices derived from the detailed Census-Penn-SRI manufacturing data file. A hypothesis suggested by previous research on the R&D-productivity relationship is that, due, perhaps, to the depletion of scientific opportunities, the "potency'' of R&D as a source of technological progress has declined in recent years. Our findings indicate, however, that the relationship between an industry's R&D-intensity and its productivity growth did not disappear; if anything, the relationship was stronger in recent years. The overall deceleration in productivity in recent years has affected R&D-intensive industries, but to a lesser extent than it has other industries. What cannot be found in the data is strong evidence of the differential effects of the slowdown in R&D itself. The time series appear to be too noisy and the period too short to detect what the major consequences of the retardation in the growth of R&D expenditures may yet turn out to be.

Suggested Citation

Griliches, Zvi and Lichtenberg, Frank R., R and D and Productivity at the Industry Level: Is There Still a Relationship? (February 1982). NBER Working Paper No. w0850, Available at SSRN: https://ssrn.com/abstract=227540

Zvi Griliches

(Deceased)

Frank R. Lichtenberg (Contact Author)

Columbia Business School - Finance and Economics ( email )

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