Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries

Rachel Griffith; Stephen J. Redding; John Van Reenen

doi:10.1162/0034653043125194

Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries

Rachel Griffith^1,2; Stephen J. Redding^3,4; John Van Reenen³

¹ Institute for Fiscal Studies · ² University College London · ³ Centre for Economic Policy Research · ⁴ London School of Economics and Political Science

The Review of Economics and Statistics 2004

Many writers have claimed that research and development (R&D) has two faces. In addition to the conventional role of stimulating innovation, R&D enhances technology transfer (absorptive capacity). We explore this idea empirically using a panel of industries across twelve OECD countries. We find R&D to be statistically and economically important in both technological catch-up and innovation. Human capital also plays an major role in productivity growth, but we only find a small effect of trade. In failing to take account of R&D-based absorptive capacity, existing U.S.-based studies may underestimate the return to R&D.

DOI: 10.1162/0034653043125194
Volume: 86 (4)
Pages: 883-895
Language: en
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