Working Paper: NBER ID: w3625
Authors: jeffrey i bernstein; m ishaq nadiri
Abstract: The purpose of this paper is to develop and estimate a model of production with endogenous technological change. Technological change arises from R&D capital accumulation decisions. These decisions respond to market and government incentives and generate R&D capital spillovers. A spillover network of senders and receivers is estimated. The network shows that each receiving industry is affected by a distinct set of R&D sources and each sending industry affects a unique set of receivers. For the receivers, spillovers generally expand product markets, lower product prices, increase production costs and input demands. For the sources, significant R&D spillovers cause the social rates of return to R&D capital to be substantially above the private returns.
Keywords: R&D; spillovers; social rate of return
JEL Codes: O31; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| R&D capital accumulation (D25) | technological change (O33) |
| technological change (O33) | product demand (R22) |
| technological change (O33) | production costs (D24) |
| R&D capital accumulation (D25) | product demand (R22) |
| R&D capital accumulation (D25) | production costs (D24) |
| R&D spillovers (O36) | product markets (D49) |
| R&D spillovers (O36) | product prices (D49) |
| R&D spillovers (O36) | social rates of return (H43) |
| R&D capital accumulation (D25) | R&D spillovers (O36) |