Econometric Modelling of R&D and Australia's Productivity
Productivity Commission Staff Working Paper
595 Pages Posted: 22 May 2006
Date Written: April 2006
Abstract
The objective of this study was to undertake a series of modelling exercises that took advantage of the additional available data to explore the effects of R&D on Australian productivity.
However, despite the advances in data and methods, our research was unable to find a consistent robust measure of the impact of R&D on productivity. In addition to core data measurement issues, the most likely explanation is that the extra data period includes disruptions or 'shocks' to the relationship between R&D and productivity performance in Australia. This has frustrated attempts to clearly determine the magnitude of any long-term relationship between R&D and Australian productivity.
The study has covered a large expanse of modelling territory and has tested the limits of standard models to explain the effect of R&D on Australia's productivity. It has also explored a promising approach that deals with influences on R&D and on productivity in separate models, but within a simple related system. However, whilst it has provided some clear and plausible results, uncertainties about magnitudes of some effects remain. A major message from all the analysis is that, at least for the time being, empirical estimates of the effects of R&D on Australian productivity are unreliable. Any assessment therefore requires a high degree of judgment.
The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.
Keywords: econometric modelling, productivity growth, research and development, innovation, R&D
JEL Classification: O
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Productivity and the Structure of Employment
By Paula Barnes, Rick Johnson, ...
-
Productivity in Australia's Wholesale and Retail Trade
By Alan Johnston, Darrell Porter, ...
-
Information Technology and Australia's Productivity Surge
By Dean Parham, Paul Roberts, ...
-
The Increasing Demand for Skilled Workers in Australia: The Role of Technical Change
By Craig De Laine, Patrick Laplagne, ...
-
Skill and Australia's Productivity Surge
By Paula Barnes and Sharon Kennard
-
Australia's Service Sector: A Study in Diversity
By Rosalie Mclachlan, Colin Clark, ...