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Specialisation precedes diversification: R&D productivity effects

James Foreman-Peck and Peng Zhou

No E2023/16, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: We model how R&D enters the innovation system in four ways (intramural, extramural, cooperative, and spillover). Despite measuring three different spillovers together, for a very large sample of European enterprises we conclude that the productivity effects of spillovers were at best smaller than intramural R&D productivity effects. We also find that building on the greater skills and experience of enterprises already undertaking R&D (intensity) raised labour productivity more than providing support for those beginning R&D (extensity). Optimal extramural R&D intensity was higher than the actual level; sample firms could boost productivity either by abandoning extramural R&D or by doing much more. There were substantial differences in our sample between enterprises and countries in terms of R&D spillovers. Greater multinational corporation incidence in new EU members accounted for these countries high direct R&D intensity productivity, regardless of their generally low overall labour productivity. Absorptive capacity made little difference to the utilisation of spillovers.

Keywords: R&D; innovation; knowledge spillover (search for similar items in EconPapers)
JEL-codes: H25 H71 L21 L53 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2023-05
New Economics Papers: this item is included in nep-cse, nep-eec, nep-eff, nep-ino, nep-knm, nep-pbe and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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