Accounting for Research and Productivity Growth Across Industries

Liwa Rachel Ngai () and Roberto Samaniego ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: What factors underlie industry differences in research intensity and productivity growth? Wedevelop a multi-sector endogenous growth model allowing for industry specific parameters inthe production functions for output and knowledge, and in consumer preferences. We findthat industry differences in both productivity growth and R&D intensity mainly reflectdifferences in "technological opportunities", interpreted as parameters of knowledgeproduction. These include the capital intensity of R&D, knowledge spillovers, anddiminishing returns to R&D. Among these parameters, we find that the degree of diminishingreturns to R&D is the dominant factor when the model is calibrated to account for crossindustrydifferences in the US.

Keywords: Multisector growth; total factor productivity; R&D intensity; technologicalopportunity (search for similar items in EconPapers)
JEL-codes: D24 O3 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-ino
Date: 2009-03
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