Razzak, Weshah and Stillman, Steve and Johnson, Robin (2005): Has New Zealand benefited from its investments in research & development? Forthcoming in: Applied Economics (2007)
Download (167kB) | Preview
We use panel data for nine industries to evaluate research and development (R&D) investments in New Zealand over the past forty years. We estimate the impact of R&D stocks in a particular industry on output per person in that industry and on output per person in the rest of the economy. We examine both public and private R&D investments. Privately provided R&D has a statistically significant positive impact on own-industry output per person, suggesting it increases productivity. However, publicly provided R&D has no impact on own-industry output per person. There is also evidence that private R&D in certain industries positively affects output per person in the rest of the economy, i.e. it generates positive spillovers. There is no evidence of positive spillovers from publicly provided R&D.
|Item Type:||MPRA Paper|
|Institution:||Department of Labour - New Zealand|
|Original Title:||Has New Zealand benefited from its investments in research & development?|
|Keywords:||R&D; spillovers; productivity|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence
C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models
|Depositing User:||Weshah Razzak|
|Date Deposited:||23 Feb 2007|
|Last Modified:||07 Oct 2016 13:51|
Andrew, L., Lin Chien-Fu, Chia-Shang and James Chu (2002) Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties, Journal of Econometrics, 108, 1-24.
Arellano, M. and S. Bond (1991) Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations, The Review of Economic Studies 58, 277-97.
Arellano, M. and O. Bover (1995) Another Look at the Instrumental Variable Estimation of Error-Component Models, Journal of Econometrics, 68, 29-52.
Arrow, K., (1962) The Economic Implications of Learning by Doing, The Review of Economic Studies 29, 155-173.
Barro, R., (1999) Notes on Growth Accounting, Journal of Economic Growth 4, 119-137.
Benhabib J. and B. Jovanovic (1991) Externalities and Growth Accounting, American Economic Review, 82-113.
Barro, R., (1999) Notes on Growth Accounting, Journal of Economic Growth 4, 119-137. Bernstein, J. and N. Ishaq, (1991) Product Demand, Cost of Production, Spillovers and the Social Rate of Return to R&D, NBER Working Paper No. 3625. Cambridge, MA. Bönte, W., (2004) Spillovers from Publicly Financed Business R&D: Some Empirical Evidence from Germany, Research Policy Vol. 33 Issue 10, 1635-1655. Breitung, J. (2000) The Local Power of Some Unit Root Tests for Panel Data, in B. Baltagi (ed.) Advances in Econometrics, Vol. 15: Non Stationary Panels, Panel Cointegration and Dynamic Panels, Amsterdam: JAI Press, 161.178.
Blundell, R. and S. Bond (1999) GMM Estimation with Persistent Panel Data: An Application to Production Functions, The Institute of Fiscal Studies Working Paper No. 99/4.
Coe, D., and E. Helpman (1995) International R&D Spillovers, European Economic Review 39, 859-887.
Elliott G., (1999) Efficient Tests for Unit Root When the Initial Observation is Drawn from its Unconditional Distribution, International Economic Review 140:3, 767-783.
Engelbrecht, H-J. (1997a) International R&D Spillovers, Human Capital and Productivity in OECD Economies: An Empirical Investigation, European Economic Review 41 (8), 1479-1488.
Engelbrecht, H-J. (1997b) International R&D Spillovers amongst OECD Economies Applied Economics Letters 4, 1997, 315-319.
Engelbrecht, H-J. (2002) Human Capital and International Knowledge Spillovers in TFP Growth of a Sample of Developing Countries: An Explanation of Alternative Approaches, Applied Economics, Vol. 34, No. 7, 831-841.
Engelbrecht, H-J. (2003) Human Capital and Economic Growth: Cross-Section Evidence for OECD Countries, Economic Record, Vol. 79, Special Issue, June, 40-51.
Engelbrecht, H-J. and N. McLellan (2001) Economic Growth Revisited: Identifying a Class of Growth Models for the New Zealand Economy, Massey University, Department of Applied and International Economics discussion paper No. 01.10.
Eveleens W. M., and G. M. Scobie, (June 1986a) Agricultural Research: What’s It Worth? Ministry of Agriculture and Fishery working paper 1/86.
Eveleens W. M., and G. M. Scobie (July 1986b) Efficiency and Equity in Agricultural Research, Economic Research Section, Ruakura Agricultural Research Centre, Discussion Paper 6/86. Goto, A. and K. Suzuki (1989) R&D’ Capital Rate of Return on R&D Investments and Spillover of R&D in Japanese Manufacturing Industries, Review of Economics and Statistics,” 71 (4), 555-564. Griliches, Z. (1979) Issues in Assessing the Contribution of Research and Development to Productivity Growth, Bell Journal of Economics 10, 92-116. Griliches, Z. (1991) The Search for R&D Spillovers, NBER Working Paper No. 3768, Cambridge, MA. Griliches, Z. (1995) R&D and Productivity: Econometric Results and Measurement Issues,” in Paul Stoneman (ed.), The Handbook of Economics of Innovation and Technological Change, Oxford: Blackwell, 52-89. Griliches, Z. and J. A. Hausman, (1986), “Errors in variables in panel Data,” Journal of Econometrics, vol.31, 98-118.
Im, K. S., M. H. Pesaran, and Y. Shin, (1997), Dept Applied Economics Cambridge DP Dec 1997 (http://www.econ.cam.ac.uk/faculty/pesaran/lm.pdf)
Johnson, R. (1999) The Rate of Return to New Zealand R&D, Unpublished Manuscript Presented at the New Zealand Association of Economists Annual Meeting 1999.
Lattimore, R. Research and development fiscal incentives in Australia: impacts and policy lessons, Industry Commission, Canberra, 1997.
Levin, A., C. F. Lin and C. S. Chu (2002) Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties, Journal of Econometrics 108, 1-24.
Lichtenberg, F. (1993) R&D Investment and International Productivity Differences, in Economic Growth in the World Economy, Symposium: Horst Siebert, (ed.) Tübingen, Mohr.
Lucas, R. Jr. (1988) On the Mechanics of Development Planning, Journal of Monetary Economics 22, 3-42.
Mairesse, J. and B. H. Hall (1996) Estimating the Production Function of Research and Development in French and US Manufacturing Firms: An Exploration of Simultaneity Issues with GMM Methods, in Wagner, K. and B. Van Ark (eds.,), International Productivity Differences and Their Explanations, Elsevier Science, 285-315.
Mairesse, J. and M. Sassenou (1991) R&D and productivity: a survey of econometric studies at the firm level, The Science Technology and Industry Review, 8 317-348.
Mansfield, E., J. Rapoport, A. Romeo, S. Wagner and G. Beardsley (1977) Social and Private Rates of Return from Industrial Innovations, Quarterly Journal of Economics, 77, 221-240.
Mohnen, P., and N. Lepine (1991) R&D, R&D Spillovers and Payments for Technology: Canadian Evidence, Structural Change and Economic Dynamics 2, 1, 212-28.
Mohnen, P., N. Ishaq and I. Prucha (1986) R&D, Production Structure and the Rate of Return in the US, Japanese and German Manufacturing Sector: A Non-Separable Dynamic Factor Demand Model, European Economic Review 30, 749-71.
Mowery D. C. and N. Rosenberg (1998) Paths of Innovation: Technological Change in the 20th Century America, New York: Cambridge University Press.
Nelson, R. and Phelps, E. (1966) Investments in Humans, Technological Diffusion, and Economic Growth, American Economic Review, Papers and Proceedings, 51, 69-75.
Perron, P., (1997) Test of Unit Root with Endogenous Time Break, Journal of Econometrics 80.
Phillips, P. C. B., (1987) Time Series Regression with a Unit Root, Econometrica, 55, 277-301.
Philpott, B.P. (1994) Data Base of Nominal and Real Output, Labour, and Capital Employed by SNA Industry group 1960-1990,” RPEP Paper 265, Victoria University.
Philpott, B.P. (1995) Real Net Capital Stock by SNA Production Groups New Zealand 1950-1991, RPEP Paper 270.
Philpott, B.P. (1999) Provisional Estimates for 1990-1998 of Output, Labour and Capital Employed by SNA Industry Group, RPEP Paper 293. Prescott, E. C. (1997) Needed: A Theory of Total Factor Productivity, Federal Reserve Bank of Minneapolis.
Prescott, E. C. Prosperity and Depression: 2002 Richard T Ely Lecture, The American Economic Annual Meeting, Atlanta, American Economic Review, May 2002, Vol. 92 no. 2, 1-15.
Razzak, W. A. (2003) Towards Building a New Consensus About New Zealand’s Productivity, Labour Market Policy Group Occasional Paper, Wellington, New Zealand.
Romer, P. (1986) Increasing Returns and Long Run Growth, Journal of Political Economy 94, 1002-1037.
Romer, P. (1990) Endogenous Technological Change, Journal of Political Economy 89:5, S71-S102.
Sala-i-Martin, X. (1990) Lecture Notes on Economic Growth, NBER Working Paper No. 3563.
Sarno, L. and M. Taylor (1998) Real Exchange Rates Under the Current Float: Unequivocal Evidence of Mean Reversion, Economics Letters 60, 131-137.
Solow, R., (1957) Technical Change and the Aggregate Production Function, Review of Economics and Statistics 39, 312-320.
Taylor, M. and L. Sarno (1998) The Behaviour of Real Exchange Rates During the Post-Bretton Woods Period, Journal of International economics 46, 281-312.
Terleckyj, N. (1974) Effects of R&D on the Productivity Growth of Industries: An Explanatory Study, National Planning Association, New York.
Wakelin, K. (2001) Productivity Growth and R&D Expenditure in UK Manufacturing Firms, Research Policy 30, 1079-1090.
Wang, Jiann-Chyuan and Kuen-Hung Tsai (2003) roductivity Growth and R&D Expenditures in Taiwan’s Manufacturing Firms, Working Paper Institute for Economic Research.
Wieser, R. (2004) R&D Productivity and Spillovers: Empirical Evidence at the Firm Level, Forthcoming at the Journal of Economic Surveys, Institute of Public Finance and Infrastructure Policy at Vienna University of Technology.