UNU-MERIT Working Papers Series
Japan's productivity and GDP growth: The role of GBAORD, public and foreign R&D
Thomas Ziesemer #2019-029We analyse the dynamic interaction of Japan's total factor productivity
(TFP), GDP, domestic and foreign private and public R&D as well as
mission-oriented R&D, GBAORD, in a cointegrated VAR for Japan with data
from 1988-2014. Analysis of effects of permanent shocks shows that (i)
public R&D, unlike GBAORD, encourages private R&D and TFP, and has high
internal rates of return. (ii) Japan's public and private R&D have a
statistically significant positive effect on foreign private and public
R&D stocks and vice versa. (iii) After transitory GDP shocks, public and
private R&D are counter-cyclical and GBAORD is pro-cyclical in Japan.
Keywords: R&D, productivity, growth, spillovers, vector-auto-regression (VAR)
JEL Classification: F43, O19, O47, O53
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