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What do we know about R&D spillovers and productivity? Meta-analysis evidence on heterogeneity and statistical power

Mehmet Ugur (), Sefa Awaworyi Churchill and Hoang M. Luong

No 25423, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: As Mohnen (1996: 40) has indicated, research and development (R&D) externalities is a two-sided theoretical issue. Its ‘dark’ side concerns the under-investment problem caused by non-appropriability of R&D benefits. On the ‘bright’ side, R&D spillovers are a source of productivity gains. Both aspects have been invoked to justify public support for R&D investment directly and indirectly. To establish whether public support can be justified due to productivity gains from spillovers, we meta-analyse 983 productivity estimates for spillovers and 501 estimates for own-R&D from 60 empirical studies. Our findings indicate that the average spillover effect is: (i) positive but heterogenous and smaller than what is reported in most narrative reviews; (ii) usually smaller than that of own-R&D capital; (iii) too small to be practically significant when evidence with adequate statistical power is considered. Controlling for observable sources of heterogeneity and best-practice research, the meta-effect is insignificant in the full sample but significant and large among OECD firms/industries/countries. We discuss the implications of these findings for future research and public support for R&D investment.

Keywords: Knowledge externalities; R&D spillovers; productivity; public policy; meta-analysis (search for similar items in EconPapers)
JEL-codes: C1 D24 O30 O32 O33 (search for similar items in EconPapers)
Date: 2019-10-03
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