Corporate R&D and Productivity in Germany and the United Kingdom

Stephen Bond, Dietmar Harhoff and John van Reenen ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper analyzes differences in R&D spending and in the impact of R&D on productivity betweenGerman and UK firms. We confirm that German firms spend significantly larger amounts on R&D thantheir UK counterparts, even after controlling for firm size and industry effects. Using a dynamicproduction function approach, we find that the R&D output elasticity is approximately the same in bothcountries, implying a much larger rate of return on R&D in the UK than in Germany. We discuss severalexplanations for this result.

Keywords: Corporate governance; R&D; productivity; financial constraints; panel data (search for similar items in EconPapers)
JEL-codes: L13 O31 C25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino
Date: 2003-12
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0599

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