Measuring the Returns of Research and Development: An Empirical Study of the German Manufacturing Sector over 45 Years
Günter Lang ()
No 10, Working Papers from The German University in Cairo, Faculty of Management Technology
Motivated by recent statistics that show significant growth in labor productivity, this paper seeks to analyze the relationship between domestic R&D, knowledge stock and productivity dynamics. Time series data of the German manufacturing industry is used to estimate a variable cost function with the stock of knowledge being dependent upon current and past R&D spending. The estimates indicate that 50 percent of the effects of R&D on the knowledge stock appear within four years. However, the rate of return on R&D are shown to be drastically declining; recent rates of return on R&D are estimated to have reached an all-time low spanning the last 45 years. Current yields of R&D are only one third compared to the sixties. In conclusion, though the productivity slowdown of the seventies seems to have been overcome, this is not attributed to R&D investments.
Keywords: Productivity; innovation; research; development; technology; productivity slowdown (search for similar items in EconPapers)
JEL-codes: D24 L60 O31 (search for similar items in EconPapers)
Pages: 24 pages
New Economics Papers: this item is included in nep-eff, nep-ino, nep-knm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://mgt.guc.edu.eg/wpapers/010lang2008.pdf First version, 2008 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:guc:wpaper:10
Access Statistics for this paper
More papers in Working Papers from The German University in Cairo, Faculty of Management Technology Contact information at EDIRC.
Bibliographic data for series maintained by Lobna Sameer ( this e-mail address is bad, please contact ).