Working Paper #2023-026
Internal rates of return for public R&D from VECM estimates for 17 OECD countries
In this paper we evaluate vector-error-correction model (VECM) estimations and simulations of a companion paper to show (i) internal rates of return to public R&D shocks of 17 OECD countries, (ii) the related payback periods, gain/GDP ratios, and discounted (at 4%) net present values, (iii) the underlying effects of public R&D shocks on domestic and foreign private and public R&D stocks. 14 countries show high internal rates of return from positive public R&D shocks if projects are stopped when gains get negative. Three countries show crowding out effects and require (initial) reductions of public R&D before showing positive results through crowding in of private R&D.
- Keywords
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- R&D
- growth
- returns
- JEL codes
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- H43
- H54
- O32
- O47
Cite this as
APA 7th ed.Ziesemer, T. (2023). Internal rates of return for public R&D from VECM estimates for 17 OECD countries (UNU-MERIT Working Paper No. 2023-026). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=9578