R&D-Productivity Dynamics: Causality, Lags, and 'Dry Holes'

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Abstract

We study four issues in R&D–productivity dynamics: does R&D Granger cause productivity, is there a lag between R&D and its productivity effects, does the potency of R&D vary in timing and magnitude, and what is the role of R&D spillovers and aggregate shocks. The results suggest that R&D causes productivity but not vice versa, productivity responds to changes in R&D with a considerable lag, the potency of R&D varies in timing and magnitude, and that the elasticity of productivity with respect to aggregate shocks is high, but negligible with respect to R&D spillovers.
Original languageUndefined
Pages (from-to)123-156
JournalJournal of Applied Economics
Volume5
Issue number1
DOIs
Publication statusPublished - May 2002
MoE publication typeA1 Journal article-refereed

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