Working Paper: NBER ID: w2901
Authors: Frank R. Lichtenberg; Donald Siegel
Abstract: This paper uses confidential Census longitudinal microdata to examine the association between R&D and productivity for the period 1972.1985. These data allow for significant improvements in measurement and model specification, yielding more precise estimates of the returns to R&D. Our results confirm the findings of existing studies: 1) positive returns to R&D investment 2) higher returns to company-financed research 3) a productivity "premium" on basic research These results are robust to our attempts to adjust for "influential" outliers. Also, it appears that the return to company-financed R&D (but not total R&D) is an increasing function of firm size.
Keywords: R&D; productivity; longitudinal data
JEL Codes: O32; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| R&D investment (O32) | total factor productivity (TFP) growth (O49) |
| company-financed research (G30) | productivity (O49) |
| federally-funded research (I23) | productivity (O49) |
| basic research (C90) | productivity (O49) |
| firm size (L25) | return to company-financed R&D (O32) |