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R&D, Innovation and the Impact on Productivity in Flanders

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  • D. Czarnitzki
  • N. O'Byrnes

Abstract

This paper presents an empirical study on productivity growth using data from the Flemish part of the Community Innovation Survey 2005. In particuiar, we investigate growth differences between R&D-performing firms and non-R&D performers. As internal R&D is only one source of innovativeness, we also consider growth contributions of product and process innovations. Using a sample of more than 1,200 firms in Flemish manufacturing and selected services, we find that R&D-performers show an almost 6%-points higher growtb rate between 2002 and 2004 than non-R&D performers, on average. However, once product and process innovation are introduced in the model, the contribution of R&D drops to about 4%-points. Interestingly, we find that process innovations are an important driver of productivity growth while product innovations have no significant impact once it is controlled for R&D activity.

Suggested Citation

  • D. Czarnitzki & N. O'Byrnes, 2007. "R&D, Innovation and the Impact on Productivity in Flanders," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(2), pages 199-216.
    • Handle: RePEc:ete:revbec:20070201
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    References listed on IDEAS

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    1. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    2. Edwin Mansfield & John Rapoport & Anthony Romeo & Samuel Wagner & George Beardsley, 1977. "Social and Private Rates of Return from Industrial Innovations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 221-240.
    3. Dirk Czarnitzki & Bernd Ebersberger & Andreas Fier, 2007. "The relationship between R&D collaboration, subsidies and R&D performance: Empirical evidence from Finland and Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1347-1366.
    4. Dirk Czarnitzki & Kornelius Kraft, 2010. "On the profitability of innovative assets," Applied Economics, Taylor & Francis Journals, vol. 42(15), pages 1941-1953.
    5. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April.
    6. Charles I. Jones & John C. Williams, 1998. "Measuring the Social Return to R&D," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1119-1135.
    7. Czarnitzki, Dirk & Kraft, Kornelius, 2004. "Innovation indicators and corporate credit ratings: evidence from German firms," Economics Letters, Elsevier, vol. 82(3), pages 377-384, March.
    8. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
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    10. Frank R. Lichtenberg, 1992. "R&D Investment and International Productivity Differences," NBER Working Papers 4161, National Bureau of Economic Research, Inc.
    11. Dirk Czarnitzki & Georg Licht, 2006. "Additionality of public R&D grants in a transition economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(1), pages 101-131, March.
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    Cited by:

    1. Dirk Czarnitzki & Kristof Van Criekingen, 2021. "Information Leakage, Imitation, and the Patent System," Working Papers of Department of Management, Strategy and Innovation, Leuven 682983, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    2. Juana Sanchez, 2014. "Non-technological and Mixed Modes of Innovation in the United States. Evidence from the Business Research and Development and Innovation Survey, 2008-2011," Working Papers 14-35, Center for Economic Studies, U.S. Census Bureau.
    3. Edeh, Jude N. & Acedo, Francisco J., 2021. "External supports, innovation efforts and productivity: Estimation of a CDM model for small firms in developing countries," Technological Forecasting and Social Change, Elsevier, vol. 173(C).

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    More about this item

    Keywords

    Productivity Growth; R&D; Innovation; Flanders; Community Innovation Survey (CIS);
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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