Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70028
Authors: 
Lang, Günter
Year of Publication: 
2002
Series/Report no.: 
Volkswirtschaftliche Diskussionsreihe, Institut für Volkswirtschaftslehre der Universität Augsburg 218
Abstract: 
Motivated by the recent reversal in labor productivity growth, this paper is analyzing the relationship between R&D expenditures and productivity. Time series data of the German manufacturing industry is used to estimate a variable cost function, with the stock of knowledge being modeled as a quasifix input. The estimates show that the extracted yield is non-constant over the observation period. Current rates of return on own R&D are found to be significantly lower than during the sixties, and no signs of a significant reversal are detected. The long-term elasticity of production costs with respect to R&D reduced from –0.04 to just -0.02, the elasticity of labor demand from –0.40 to -0.15. Since the growth rates of research expenditures were also declining, the contribution of R&D to productivity growth is currently stagnating at the lowest level since 1960.
Subjects: 
technology
innovation
research and development
productivity
JEL: 
D24
O31
Document Type: 
Working Paper

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