Rising R&D Intensity and Economic Growth

Andreas Pollak

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: Over the past decades, private R&D spending in the US and other developed countries has been growing faster than GDP. In the United States, for example, R&D expenditures (excluding those funded by the federal government) have grown from 0.63% of GDP in 1953 to 1.95% of GDP in 2007, i.e. R&D intensity has increased by more than a factor of three in half a century. At the same time, the growth rates of per capita and aggregate output have been rather stable, possibly declining slightly. Standard models of endogenous growth and R&D cannot easily reproduce or explain this observation, not even along a transition path. This paper proposes a growth model that can account for the observed phenomenon by explicitly describing competition among technological leaders and followers in individual markets in a way that is consistent with existing studies on firms’ motivation to invest in R&D. The model shows that it is possible that the eventually unsustainable trend of rising R&D intensity persists for a very long time.

Keywords: Endogenous Growth; Research & Development; Market Structure (search for similar items in EconPapers)
JEL-codes: L1 O3 O4 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2010-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: RISING R&D INTENSITY AND ECONOMIC GROWTH (2014)
Working Paper: Rising R&D Intensity and Economic Growth (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:deg:conpap:c015_057

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