R-AND-D AND PRODUCTIVITY - A BROAD CROSS-SECTION CROSS-COUNTRY LOOK

The empirical literature on R&D and productivity has shown that there is indeed a positive influence of R&D investment, on output growth. However, the exact relation depends to a large extent on the approach chosen (i.e., functional form). Because most studies concentrate on a limited number of countries or sectors and use their own specific methodology, comparison is difficult. This paper aims at providing a broad overview of crosscountry and cross-sector differences in the relation between (direct) R&D and output growth, using a common methodology, so that comparison is easier. The functional form used is a translog production function, which is applied to data for 15 manufacturing sectors and 9 principal OECD countries.