This paper analyses the returns to publicly performed R&D investments in 22 OECD countries. We exploit a dataset containing time-series from 1963 to 2011 and compare the estimates of diferent types of production function models. Robustness analyses are performed to test the sensitivity of the outcomes for particular specifcations, sample selections, assumptions about the construction of R&D stocks, and variable defnitions. Analyses based on Cobb–Douglas and translog production functions mostly yield statistically insignifcant or negative returns. In these models we control for private and foreign R&D investments and the primary production factors. Models including additional controls, such as public capital, the stock of inward and outward foreign direct investment, and the shares of high-tech imports and exports, yield more positive returns. Our fndings suggest that publicly performed R&D investments do not automatically foster GDP and TFP growth in production function models. Furthermore, our estimates suggest that economic returns to publicly performed R&D seem to depend on the specifc national context.

Additional Metadata
Keywords Science · Knowledge · Public R&D · Economic growth · Total factor productivity
JEL Higher Education Research Institutions (jel I23), Macroeconomic Analyses of Economic Development (jel O11), Economic Growth and Aggregate Productivity: General (jel O40), Measurement of Economic Growth; Aggregate Productivity (jel O47)
Persistent URL dx.doi.org/10.1007/s10645-019-09331-3, hdl.handle.net/1765/115874
Journal De Economist
Citation
van Elk, R., ter Weel, B., van der Wiel, K., & Wouterse, B. (2019). Estimating the Returns to Public R&D Investments: Evidence from Production Function Models. De Economist, 167(1), 45–87. doi:10.1007/s10645-019-09331-3