Working Paper #2015-042
A macroeconomic analysis of the returns to public R&D investments
This paper analyses the economic returns to public R&D investments in 22
OECD countries. We exploit a dataset containing time series from 1963 to
2011 and estimate and compare the outcomes of different types of
production function models. Robustness analyses are performed to test
the sensitivity of the outcomes for particular model specifications,
sample selections, assumptions with respect to the construction of R&D
stocks, and variable definitions. Analyses based on Cobb-Douglas and
translog production functions mostly yield statistically insignificant
or negative returns. In these models we control for private and foreign
R&D investments and the primary production factors. Models including
additional controls, such as public capital, the stock of inward and
outward foreign direct investment, and the shares of high-tech imports
and exports, yield more positive returns. Our findings suggest that
public R&D investments do not automatically foster GDP and TFP growth.
The economic return to scientific research seems to depend on the
specific national context.
- Keywords
-
- science
- knowledge
- public R&D
- economic growth
- total factor productivity
- JEL codes
-
- I23
- O11
- O40
- O47
Cite this as
APA 7th ed.van Elk, R., Verspagen, B., ter Weel, B., van der Wiel, K., & Wouterse, B. (2015). A macroeconomic analysis of the returns to public R&D investments (UNU-MERIT Working Paper No. 2015-042). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=5875