Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/50860 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
KOF Working Papers No. 105
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
This paper examines the relationships between the R&D sector activities of the EU and the US using multivariate Granger-causality tests. The multivariate framework employed also allows us to make causal inferences about the effects of R&D activity on labour productivity in the home and foreign country. As a novelty, we employ the subset transfer function methodology to account for the possibility of dry holes in the effects of R&D efforts on economic activity. Our estimation results indicate that R&D activity in the EU is a direct Granger-cause of both R&D and labour productivity in the US, and the effects are negative. On the other hand, the EU reacts positively to increases in R&D productivity in the US. These findings are largely in line with the actual developments in the productivity differentials between the EU and the US and the patterns in their relative shares in the world market for high tech exports.
Subjects: 
R&D races
productivity spillovers
direct Granger-causality
EU's Lisbon targets
high tech exports
JEL: 
O30
O40
C32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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