Results from multi-country macroeconomic studies on the economic effects of R&D on productivity30
| Study author and date |
Economic Impacts of a 1% increase in R&D on productivity/GDP per capita |
| Coe and Helpman (1995) |
0.247 for G7 and 0.107 for others. Study of 22 countries which looked at impact of private R&D on MFP. |
| Van Pottelsberghe and Lichtenberg (2001) |
0.087 for G7 and 0.008 in small countries. Study of 13 countries which looked at impact of private R&D on MFP. |
| Lichtenberg and Van Pottelsberghe (1996) |
0.083 for G7 countries and 0.017 in small countries. Study of 13 countries which looked at the impact of private R&D on MFP. |
| Luintel and Khan (2003) |
Average of 0.27 for all R&D and 0.06 for business R&D. Study of 10 countries from 1965–1999 which looked at impact on MFP. |
| Guellec and Van Pottelsberghe de la Potterie (2001) |
Average of 0.132 for business R&D and 0.171 for public R&D. Study of 16 countries from 1980–1998 which looked at impact on MFP. |
| Aiginger and Frank (2004) |
0.22 for business R&D. Study of 21 OECD countries from 1970–1999 which looked at impact on long run GDP per capita. |
| Bassanini and Scarpetta (2001) |
0.14 for all R&D and 0.13 for private R&D. Study of 16 OECD countries from 1981-1998 which looked at impact on GDP per capita |
| Luintel and Khan (2005b) |
0.048 for US to 1.102 for Ireland. Study of 19 countries from 1981–2000 which used patent data to assess impact on MFP. |
| Luintel and Khan (2006) |
0.11 for business R&D and 0.28 for public R&D (Australia). Study of 16 OECD countries from 1980–2002 which broke down impact on MFP for each country. Country averages were 0.17 for business R&D and 0.21 for public. |
| Gans and Hayes (2007) |
0.11 for Australia for Business R&D (MFP) |
Also, the Productivity Commission conducted a study on the impact of R&D on productivity in the Australian context in 2006. The analysis concluded that it was not possible to demonstrate a link due to inadequacies in the measurement of R&D and
the absence of a stable long run relationship between R&D and productivity which resulted from shocks in the late 1980s and 1990s caused by microeconomic reforms.
The PC didn’t say there was not a link, but that one could not be found due to the constraints identified above. In this context it is interesting to note the Australian findings of the 2006 OECD multi-country study by Khan and Luintel mentioned in the table above. In its 2007 Review of Public Support for Science and Innovation, the Commission said that this study represents the best existing empirical analysis of the role of different types of R&D on economic growth.
References
30 “Public Support for Science and Innovation”, Productivity Commission, Canberra, Australia, 2007
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