R&D Races and Spillovers between the EU and the US: Some Causal Evidence
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Author
Date
2005-08Type
- Working Paper
ETH Bibliography
yes
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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. Show more
Permanent link
https://doi.org/10.3929/ethz-a-005104832Publication status
publishedJournal / series
KOF Working PapersVolume
Publisher
KOF Swiss Economic Institute, ETH ZurichSubject
Productivity spillovers; R&D races; Direct Granger-causality; FORSCHUNG UND ENTWICKLUNG; RESEARCH AND DEVELOPMENT; Europäische Union; EU's Lisbon targets; WIRTSCHAFTLICHER WETTBEWERB; ECONOMIC COMPETITION; High tech exports; HOCHSCHULWETTBEWERB (HOCHSCHULWESEN); VEREINIGTE STAATEN VON AMERIKA, USA (NORDAMERIKA); UNIVERSITY COMPETITION (HIGHER EDUCATION); UNITED STATES OF AMERICA, USA (NORTH AMERICA)Organisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
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ETH Bibliography
yes
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