The transatlantic productivity gap: Is R&D the main culprit?

Raquel Ortega-Argiles, Mariacristina Piva and Marco Vivarelli ()

Canadian Journal of Economics, 2014, vol. 47, issue 4, 1342-1371

Abstract: The literature has pointed to different causes to explain the productivity gap between the EU and the US in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate R&D investment but also by a lower capacity to translate R&D investment into productivity gains. The proposed microeconometric estimates are based on a unique longitudinal database covering the period 19902008 and comprising 1,809 US and EU companies for a total of 16,079 observations. Consistent with previous literature, we find robust evidence of a significant impact of R&D on productivity; however, using different estimation techniques, the R&D coefficients for the US firms always turn out to be significantly higher. To see to what extent these transatlantic differences in the R&D/productivity relationship may be related to the different sectoral structures in the US and the EU, we differentiated the analysis by sectors. The result is that bothin manufacturing, services and hightech manufacturing sectors US firms are more able to translate their R&D investments into productivity increases.

Date: 2014
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Citations: View citations in EconPapers (37)

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Journal Article: The transatlantic productivity gap: Is R&D the main culprit? (2014)
Working Paper: The transatlantic productivity gap: Is R&D the main culprit? (2012)
Working Paper: The Transatlantic Productivity Gap: Is R&D the Main Culprit? (2011)
Working Paper: The Transatlantic Productivity Gap: Is R&D the Main Culprit? (2011)
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