Working Paper: NBER ID: w31471
Authors: Shawn Kantor; Alexander T. Whalley
Abstract: We estimate the long-term effect of public R&D on growth in manufacturing by analyzing new data from the Cold War era Space Race. We develop a novel empirical strategy that leverages US-Soviet rivalry in space technology to isolate windfall R&D spending. Our results demonstrate that public R&D conducted by NASA contractors increased manufacturing value added, employment, and capital accumulation in space related sectors. While migration responses were important, they were not sufficient to generate a wedge between local and national effects. The iconic Moonshot R&D program had only modest economic effects for both the local and national space-related sectors.
Keywords: Public R&D; Economic Growth; NASA; Space Race; Manufacturing
JEL Codes: H54; N12; N72; O32; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Space race (H56) | NASA contracting activity expansion (L33) |
| NASA contracting activity expansion (L33) | Manufacturing value added, employment, and capital expansion (L60) |
| NASA's R&D spending (O32) | Local economic growth in specialized industry-county pairs (R11) |
| NASA spending (E01) | Local economic impacts (F69) |
| NASA's R&D spending (O32) | Migration of inventors (O39) |
| NASA's R&D spending (O32) | Local vs national fiscal multipliers (E62) |
| NASA's R&D spending (O32) | Productivity growth (O49) |