Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/329459 
Year of Publication: 
2025
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 13 [Issue:] 6 [Article No.:] 179 [Year:] 2025 [Pages:] 1-22
Publisher: 
MDPI, Basel
Abstract: 
This study examines the impact of research and development (R&D) on productivity outcomes across South African industries. Drawing on an industry-level panel dataset covering 66 industries (6 mining, 37 manufacturing, and 23 services) stretching from 1993 to 2023, the study estimates how a change in the initial R&D stock affects labor and capital productivity over a five-year horizon using the Feasible Generalized Least Squares (FGLS) method. The results reveal a positive but weak elasticity of labor productivity to R&D stock (0.01-0.02%), consistent with existing literature. The effects on capital productivity are even lower (0.003-0.005%), suggesting that R&D more directly enhances labor productivity than capital. Sectoral estimations indicate that R&D has no significant effect on labor productivity in mining but a strong productivity effect in manufacturing and services - twice as large in the latter. In contrast, capital productivity gains are only evident in mining. Additionally, the study finds that R&D effects are larger in technology-intensive industries, and the productivity benefits increase with the share of skilled workers, underscoring the importance of absorptive capacity. Overall, the findings suggest that while R&D matters for productivity, its returns are stronger in human capital- and technology-intensive industries.
Subjects: 
R&D
labor productivity
capital productivity
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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