Technology, Human Capital and Productivity Growth: Should We Care About Threshold Effects? Evidence from a Panel of EU Industries
19 Pages Posted: 1 Jun 2007
Date Written: February 2007
This paper assesses whether the linkages between R&D, human capital and productivity growth in a panel of EU manufacturing industries over the period 1980-2000 are affected by a critical level of human capital. To employ our data in efficient manner, the study makes use of a dynamic panel-based analysis, which determines endogenously the sample splitting procedure. The estimates indicate the presence of a threshold level based on the size-level of human capital. Countries with human capital levels above the threshold receive higher productivity growth benefits from higher R&D.
Keywords: productivity growth, R&D, human capital, threshold effects, manufacturing industries, EU countries, panel data
JEL Classification: O40, L60, C23
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