Aggregation Effects and Panel Data Estimation Problems: An Investigationof the R&D Intensity Decision

47 Pages Posted: 15 Feb 2001  

Ariel Pakes

National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Date Written: May 1979

Abstract

This paper considers why the determinants of the inter- and intra-industry variance in R&D intensity in U.S. manufacturing differ markedly even though response parameters are similar across industries. A similar aggregation effect is noted by Grunfeld and Griliches (1960), and this paper gives that effect operational content in terms of grouped data estimation procedures. Observationally equivalent aggregation results can be generated by errors in variables models (see Aigner and Goldfeld [1974]).A later section considers specifications which identify the empirical importance of both these problems. Finally, a summary of the empirical results on the determinants of R&D intensity is provided.

Suggested Citation

Pakes, Ariel, Aggregation Effects and Panel Data Estimation Problems: An Investigationof the R&D Intensity Decision (May 1979). NBER Working Paper No. w0344. Available at SSRN: https://ssrn.com/abstract=260520

Ariel Pakes (Contact Author)

National Bureau of Economic Research (NBER) ( email )

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Harvard University - Department of Economics ( email )

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