Why don’t Poor Countries do R&D?
Edwin Goni (wmaloney@worldbank.org) and
William Maloney
No 11947, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE
Abstract:
Using a global panel on research and development (R&D) expenditures, this paper documents that on average poor countries do far less R&D than rich as a share of GDP. This is arguably counter intuitive since the gains from doing the R&D required for technological catch up are thought to be very high and Griffith et al. (2oo4) have documented that in the OECD returns increase dramatically with distance from the frontier. Exploiting recent advances in instrumental variables in a varying coefficient context we find than the rates of return follow an inverted U: they rise with distance to the frontier and then fall thereafter, potentially turning negative for the poorest countries. The findings are consistent with the importance of factors complementary to R&D, such as education, the quality of scientific infrastructure and the overall functioning of the national innovation system, and the quality of the private sector, which become increasingly weak with distance from the frontier and the absence of which can offset the catch up effect. China’s and India’s explosive growth in R&D investment trajectories in spite of expected low returns may be justified by their importing the complementary factors in the form of multinational corporations who do most of the patentable research.
Keywords: R&D; Technology Adoption; Development; Complementarities; Instrumental Variable Varying Coefficient Models. (search for similar items in EconPapers)
JEL-codes: O1 O32 O33 O4 (search for similar items in EconPapers)
Pages: 45
Date: 2014-06-19
New Economics Papers: this item is included in nep-cse, nep-gro, nep-ino, nep-knm and nep-sbm
References: Add references at CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
https://repositorio.uniandes.edu.co/bitstream/handle/1992/8497/dcede2014-23.pdf
Related works:
Working Paper: Why don't poor countries do R&D ? (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:col:000089:011947
Access Statistics for this paper
More papers in Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE Contact information at EDIRC.
Bibliographic data for series maintained by Universidad De Los Andes-Cede (infocede@uniandes.edu.co).