tailieunhanh - CEP Discussion Paper No 914: Accounting for Research and Productivity Growth Across Industries

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. | CENTRE for ECONOMIC PERFORMANCE CEP Discussion Paper No 914 March 2009 Revised May 2009 Accounting for Research and Productivity Growth Across Industries L. Rachel Ngai and Roberto M. Samaniego n THE LONDON School 01 Economics AHO POLITICAL Science E- s R c Abstract 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. JEL Codes D24 O3 O41 Keywords Multisector growth total factor productivity R D intensity technological opportunity This paper was produced as part of the Centre s Macro Programme. The Centre for Economic Performance is financed by the Economic and Social Research Council. Acknowledgements The authors are grateful to Bart Hobijn Anna Ilyina Boyan Jovanovic Chad Jones Per Krusell Chris Pissarides Mark Schankerman John Van Reenen Chungyi Tse Alwyn Young and participants in seminars at several universities and conferences. We are particularly grateful to Gianluca Violante for providing us with quality-adjusted capital price data. All errors and .