Granger causality test on R&D spatial spillovers and productivity growth

Wen-Cheng Lu, Jong-Rong Chen () and Chia-Ling Wang

Applied Economics Letters, 2006, vol. 13, issue 13, 857-861

Abstract: This paper uses panel data of Taiwanese electronics firms to investigate the Granger causality relationship between R&D and productivity growth, while taking into account the effect of R&D spatial spillovers. Unlike previous studies, the R&D spatial spillover effect is calculated by a geographic formula of longitude and latitude. Before determining the direction of causality between the TFP growth and R&D effort, we execute the panel unit root test to examine the stationarity of the data. Results indicate that all variables in the model are stationary, and that R&D stock and R&D spatial spillovers Granger cause productivity growth.

Date: 2006
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DOI: 10.1080/13504850500425360

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