R&D capital and economic growth: The empirical evidence

Kieran Mc Morrow () and Werner Röger ()
Additional contact information
Kieran Mc Morrow: European Commission, Postal: DG ECFIN
Werner Röger: European Commission, Postal: DG ECFIN

No 4/2009, EIB Papers from European Investment Bank, Economics Department

Abstract: This paper reviews the empirical literature on rates of return on R&D and interprets the economic significance of these estimates using a semi-endogenous growth model with a calibrated knowledge production sector. We analyse how R&D subsidies, a reduction of entry barriers for start-ups and increasing high-skilled labour would contribute towards raising productivity and knowledge investment in the EU. The simulation results show that substantial efforts will have to be made if Europe wants to come close to achieving the Lisbon productivity and knowledge-investment targets. Achieving US standards in all three areas would reduce the productivity gap by about 50 percent. Improving the quality of tertiary education and increasing competition in non-manufacturing sectors would also help the EU to get to the productivity frontier.

Keywords: Productivity differences; endogenous growth; R&D; DSGE models (search for similar items in EconPapers)
JEL-codes: E10 O20 O30 O41 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2009-12-23
New Economics Papers: this item is included in nep-dge, nep-eff, nep-fdg, nep-ino and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.eib.org/attachments/efs/eibpapers/eibpa ... 4_n01_en.pdf#page=96 Full text (application/pdf)

Related works:
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:ris:eibpap:2009_004

Access Statistics for this paper

More papers in EIB Papers from European Investment Bank, Economics Department Contact information at EDIRC.
Bibliographic data for series maintained by Polyxeni Kanelliadou ().