The lag structure of returns to research and development

Research and development (R&D) is an important contributor to productivity growth. The ratio of privately financed R&D to industry sales peaked in 1970 at 2.2% and has since declined to 2%. Meanwhile, the US has experienced a productivity growth slump. New insights into the lagged effect of...

Full description

Saved in:
Bibliographic Details
Published in:Applied economics 1982-12, Vol.14 (6), p.603-620
Main Authors: Ravenscraft, D., Scherer, F. M.
Format: Article
Language:English
Subjects:
Economic theory
Profits
R&D
Regression analysis
Research & development
Returns
Structure
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Research and development (R&D) is an important contributor to productivity growth. The ratio of privately financed R&D to industry sales peaked in 1970 at 2.2% and has since declined to 2%. Meanwhile, the US has experienced a productivity growth slump. New insights into the lagged effect of industrial R&D on profitability are found using micro-data and econometric techniques. Evidence indicates the lag structure is bell-shaped with a mean lag of 4-6 years. Two samples seem to show that profit returns from R&D rose during the late 1970s from the early 1970s when return levels may have been sufficiently depressed to bring about large cutbacks in R&D. Mature markets realized a greater R&D profit return than did technologically dynamic markets.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036848200000036