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Three cheers for industry: Is manufacturing linked to R&D, exports, and productivity growth?

Alex Coad () and Antonio Vezzani ()

Structural Change and Economic Dynamics, 2019, vol. 50, issue C, 14-25

Abstract: Many industrialized countries in Europe and North America have experienced a steady decline in the manufacturing sector over the last few decades. Amid growing concerns that outsourcing and offshoring have destabilized European economies, policymakers have suggested that a large manufacturing sector can: i) boost R&D, ii) encourage exporting, and iii) raise productivity. We examine these claims. Non-parametric plots and regressions show a robust positive association between the manufacturing sector and Business Expenditures on R&D (BERD), while the relationship between manufacturing and exports or productivity is more elusive. Our results suggest that increasing the manufacturing value added share may lead to an overall higher R&D intensity, because the manufacturing sector generally has a higher R&D intensity than the non-manufacturing business sector, although manufacturing sector R&D does not seem to create externalities leading to higher non-manufacturing R&D.

Keywords: Manufacturing sector; R&D; Exporting; Productivity; Industrial policy; Industrial; Renaissance (search for similar items in EconPapers)
JEL-codes: O3 O14 O47 (search for similar items in EconPapers)
Date: 2019
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Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

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