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Accounting for research and productivity growth across industries

Ngai, L. Rachel and Samaniego, Roberto M. (2009) Accounting for research and productivity growth across industries. CEP Discussion Papers (914). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry specific parameters in the production functions for output and knowledge, and in consumer preferences. We find that long run industry differences in both productivity growth and R&D intensity mainly reflect differences in "technological opportunities", interpreted as the parameters of knowledge production. These include the capital intensity of R&D, knowledge spillovers, and diminishing returns to R&D. To investigate the quantitative importance of these factors, we calibrate the model using US industry data. We find that the observed variation in the capital intensity of research cannot account for industry differences in productivity growth rates, and that variation in intertemporal knowledge spillovers has counterfactual predictions for R&D intensity when it is an important factor behind differences in productivity growth rates. This suggests that diminishing returns to research activity is the dominant factor.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2009 the authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
Date Deposited: 14 Oct 2009 11:47
Last Modified: 16 May 2024 11:48

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