The Dynamics of R&D and Innovation in the Long Run and in the Short Run

Giovanni Peri () and Laura Bottazzi ()

Working Papers from University of California at Davis, Department of Economics

Abstract: In this paper we estimate the dynamic relationship between resources used in R&D by some OECD countries and their innovation output as measured by patent applications. We first estimate a long-run cointegration relation using recently developed tests and panel estimation techniques. We find that the stock of knowledge of a country, its R&D resources and the stock of international knowledge move together in the long run. Then, imposing this long-run relation across variables we analyze the impulse response of new ideas to a shock to R&D or to a shock to innovation by estimating an error correction mechanism. We find that internationally generated ideas have a very significant impact in helping innovation in a country. As a consequence, a positive shock to innovation in a large country as the US has, both in the short and in the long run, a significant positive effect on the innovation of all other countries.

JEL-codes: C23 F43 O31 (search for similar items in EconPapers)
Date: Written
View list of references

Downloads: (external link)
http://www.econ.ucdavis.edu/working_papers/03-7.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: http://EconPapers.repec.org/RePEc:ecl:ucdeco:03-7

Access Statistics for this paper

More papers in Working Papers from University of California at Davis, Department of Economics
Contact information at EDIRC.
Series data maintained by ().