Working Paper: NBER ID: w5628
Authors: Tamim Bayoumi; David T. Coe; Elhanan Helpman
Abstract: We examine the growth promoting roles of R&D, international R&D spillovers, and trade in a world econometric model. A country can raise its total factor productivity by investing in R&D. But countries can also boost their productivity by trading with other countries that have large stocks of knowledge from their cumulative R&D activities. We use a special version of MULTIMOD that incorporates R&D spillovers among industrial countries and from industrial countries to developing countries. Our simulations suggest that R&D, R&D spillovers, and trade play important roles in boosting growth in industrial and developing countries.
Keywords: R&D; spillovers; economic growth; productivity; international trade
JEL Codes: F43; O31; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| R&D investment (O32) | output growth (O40) |
| R&D investment (O32) | productivity (O49) |
| R&D investment (O32) | output growth (other industrial countries) (F29) |
| R&D investment (O32) | output growth (developing countries) (O00) |
| R&D investment in industrial countries (O32) | output growth in developing countries (O54) |
| Trade expansion (F10) | output growth (developing countries) (O00) |
| R&D investment (1% increase in GDP) (O39) | output growth (industrial countries) (O40) |