Working Paper: NBER ID: w12829
Authors: Sean M. Dougherty; Robert Inklaar; Robert H. McGuckin; Bart Van Ark
Abstract: Purchasing power parities (PPPs) for R&D expenditure in 19 manufacturing industries are developed for France, Germany, Japan, the Netherlands and the United Kingdom relative to the United States for the years 1997 and 1987. These PPPs are based on R&D input prices for specific cost categories and differ substantially from current practice of comparing R&D expenditure using GDP PPPs and deflators. After taking into account differences in the relative price of R&D labor and materials, separate PPPs for other R&D cost categories are less essential, and a simpler version using GDP PPPs for these other categories should suffice. Our preferred PPPs are used to compare international R&D costs and intensity. The results suggest that the efforts devoted to R&D in each country are more similar across countries than is apparent using the nominal R&D intensities that are currently the norm.
Keywords: R&D; Purchasing Power Parities; International Comparisons
JEL Codes: C43; L16; L60; O32; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| R&D expenditures (O32) | actual resources devoted to R&D (O32) |
| R&D-specific PPPs (O32) | actual resources devoted to R&D (O32) |
| nominal R&D intensities (O32) | comparability of R&D efforts across countries (O57) |
| R&D-specific PPPs (O32) | comparability of R&D efforts across countries (O57) |