RandD, innovation, and Economic Growth: An Empirical Analysis
- 1 January 2004
- journal article
- Published by International Monetary Fund (IMF) in IMF Working Papers
- Vol. 4 (185)
- https://doi.org/10.5089/9781451859447.001
Abstract
This paper investigates the main postulations of the R&D based growth models that innovation is created in the R&D sectors and it enables sustainable economic growth, provided that there are constant returns to innovation in terms of R&D. The analysis employs various panel data techniques and uses patent and R&D data for 20 OECD and 10 Non-OECD countries for the period 1981-97. The results suggest a positive relationship between per capita GDP and innovation in both OECD and non-OECD countries, while the effect of R&D stock on innovation is significant only in the OECD countries with large markets. Although these results provide support for endogenous growth models, there is no evidence for constant returns to innovation in terms of R&D, implying that innovation does not lead to permanent increases in economic growth. However, these results do not necessarily suggest a rejection of R&D based growth models, given that neither patent nor R&D data capture the full range of innovation and R&D activities.Keywords
Other Versions
This publication has 18 references indexed in Scilit:
- R&D, Human Capital and International Technology Spillovers: A Cross‐country AnalysisThe Scandinavian Journal of Economics, 2000
- Growth Empirics: A Panel Data ApproachThe Quarterly Journal of Economics, 1995
- Time Series Tests of Endogenous Growth ModelsThe Quarterly Journal of Economics, 1995
- The Origins of Endogenous GrowthJournal of Economic Perspectives, 1994
- Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment EquationsThe Review of Economic Studies, 1991
- On Patents, R & D, and the Stock Market Rate of ReturnJournal of Political Economy, 1985
- Interindustry Technology Flows and Productivity Growth: A ReexaminationThe Review of Economics and Statistics, 1984
- Inter-Industry Technology Flows and Productivity GrowthThe Review of Economics and Statistics, 1982
- The Economic Implications of Learning by DoingThe Review of Economic Studies, 1962
- Hybrid Corn: An Exploration in the Economics of Technological ChangeEconometrica, 1957