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Effects of Public and Private R&D on Private-Sector Performance in the United States

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  • Robert B. Archibald
  • Alfredo M. Pereira

Abstract

This study analyzes the effects of public and private research and development (R&D) on private-sector output, employment, and investment using a multivariate time-series approach. This approach follows the conceptual argument that dynamic feedbacks are essential to understanding the relationship between public-funded R&D and private-sector performance. With this approach, the authors are able to measure the total effects of public and private R&D on private output. The results suggest that in the long term, public R&D does not affect employment but crowds in private investment, whereas private R&D is a substitute for both. As a consequence, the long-term effects of public R&D on output are positive and substantial, whereas the effects of private R&D are at best marginally positive. As a corollary, the authors argue that public R&D should be brought into the limelight as a leading candidate for explaining the growth slowdown in the past decades.

Suggested Citation

  • Robert B. Archibald & Alfredo M. Pereira, 2003. "Effects of Public and Private R&D on Private-Sector Performance in the United States," Public Finance Review, , vol. 31(4), pages 429-451, July.
    • Handle: RePEc:sae:pubfin:v:31:y:2003:i:4:p:429-451
    DOI: 10.1177/1091142103031004005
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    References listed on IDEAS

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    Cited by:

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    2. Bergman, Karin, 2011. "Productivity Effects of Privately and Publicly Funded R&D," Working Papers 2011:28, Lund University, Department of Economics.
    3. Yemane Wolde-Rufael, 2009. "Does Public R&D Crowd Out Private R&D? A Note From Taiwan, Roc," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 34(1), pages 59-69, June.
    4. Goel, Rajeev K. & Payne, James E. & Ram, Rati, 2008. "R&D expenditures and U.S. economic growth: A disaggregated approach," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 237-250.
    5. Bor, Yungchang Jeffery & Chuang, Yih-Chyi & Lai, Wei-Wen & Yang, Chung-Min, 2010. "A dynamic general equilibrium model for public R&D investment in Taiwan," Economic Modelling, Elsevier, vol. 27(1), pages 171-183, January.
    6. Claudia Capozza & Angela Stefania Bergantino & Angela De Carlo, 2013. "The Role of Transport Infrastructures in determining Technical Efficiency in R&D activity of Italian regions. A double-bootstrapped DEA procedure," ERSA conference papers ersa13p1052, European Regional Science Association.
    7. Dongwook Seoh & Tobin Im, 2020. "What Drives National Research And Development Performance? - Factors In Competitive Government Financing Of Science And Technology," Public administration issues, Higher School of Economics, issue 5, pages 191-215.

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