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International R&D Spillovers and Marginal Social Returns on R&D

45 Pages Posted: 1 Feb 2017  

Kazuo Ogawa

Osaka University - Institute of Social and Economic Research (ISER)

Elmer Sterken

University of Groningen - Faculty of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute)

Ichiro Tokutsu

Konan University

Date Written: December 20, 2016

Abstract

We analyze the impact of international R&D spillovers on recipient countries in terms of social and private returns. We divide the aggregate R&D stock by the business, government and education sectors and examine the impact on Total Factor Productivity. We endogenize the accrual of the R&D stocks by estimating an R&D investment function. We find that the marginal social returns on R&D are much larger than the marginal private returns for R&D-intensive countries. It implies that R&D intensive countries are expected to generate more spillovers at the margin, but the observed R&D stock is smaller than the socially optimal level.

Keywords: R&D, spillovers, total factor productivity, social returns, private returns

JEL Classification: E220, O320, O330, O470

Suggested Citation

Ogawa, Kazuo and Sterken, Elmer and Tokutsu, Ichiro, International R&D Spillovers and Marginal Social Returns on R&D (December 20, 2016). CESifo Working Paper Series No. 6255. Available at SSRN: https://ssrn.com/abstract=2909608

Kazuo Ogawa (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan
+81 6 6879 8570 (Phone)

Elmer Sterken

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

Postbus 72
9700 AB Groningen
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Ichiro Tokutsu

Konan University ( email )

8-9-1 Okamoto Higashinadaku
Kobe 658-8501
Japan

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