Semi-endogenous growth models with domestic and foreign private and public R&D linked to VECMs with evidence for five countries

Thomas Ziesemer ()

No 2020-013, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: We present semi-endogenous growth models with productivity as functions of domestic and foreign private and public R&D. In a small country case with a Cobb-Douglas productivity production function, foreign R&D drives steady-state growth and the production function can be a long-term relation in a vector-error-correction model (VECM). Marginal productivity conditions can be long-term relations for a vector-error-correction model if the functional form is of a VES function generalising a CES function. Combining the marginal products of VES functions with recent evidence from VECMs for five countries shows that private and public R&D have a positive effect on productivity (except for France), and a negative R&D augmenting technical change. In case of a VES function, steady states with constant R&D/productivity ratios exist only for special cases of parameter restrictions, which are not supported by the evidence.

Keywords: Productivity; endogenous (un)balanced growth; public R&D expenditure; foreign spillover (search for similar items in EconPapers)
JEL-codes: H54 H87 O38 O40 O41 (search for similar items in EconPapers)
Date: 2020-03-31
New Economics Papers: this item is included in nep-eff and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2020013

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