R&D and Development
39 Pages Posted: 7 Jul 2003
Date Written: April 2003
This paper employs a new global panel data set on innovation related variables to examine patterns of R&D investment across the development process. We find that R&D effort measured as a share of GDP rises with development at an increasing rate, but that several countries have experienced extraordinary "take offs" relative to the median tendency. Our estimates of the rates of return to R&D suggest that these efforts are justified. Moreover, the returns to R&D appear higher for developing countries. Differences in financial depth, protection of intellectual property rights, government capacity to mobilize resources, and the quality of research institutions appear as the main reasons that developing countries invest less despite higher returns. Finally, natural resource abundant countries show higher returns to R&D although lower overall investment.
Keywords: R&D, Innovation, Patents, Technological Change
JEL Classification: O1, O3, O33, O57
Suggested Citation: Suggested Citation