The source of the US /EU Productivity Gap:Less and less effective R&D
Mariacristina Piva (),
Torben Schubert and
Marco Vivarelli ()
LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy
Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which - instead of purely aiming at stimulating higher R&D expenditures - works on improving the firms' capabilities to transform R&D into productivity gains.
Keywords: R&D; productivity; economic crisis; US; EU (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2018/16
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