Quarterly Journal of Economics Vol. 113 No. 4 1998
Measuring the Social Return to R&D
Abstract
Is there too much or too little research and development (R&D)? In this paper we bridge the gap between the recent growth literature and the empirical productivity literature. We derive in a growth model the relationship between the social rate of return to R&D and the coefficient estimates of the empirical literature and show that these estimates represent a lower bound. Furthermore, our analytic framework provides a direct mapping from the rate of return to the degree of underinvestment in research. Conservative estimates suggest that optimal R&D investment is at least two to four times actual investment.
- DOI
- 10.1162/003355398555856
- Volume
- 113
- Issue
- 4
- Pages
- 1119-1135
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib