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Is R&D Enough in Improving Firm Productivity?

Author

Listed:
  • Jianmin Tang
  • Weimin Wang

Abstract

Research and development (R&D) is critical to innovation that enhances productivity. Going beyond a simple relationship between R&D and firm productivity performance, this article investigates what co-investments and other business operating conditions facilitate R&D in improving productivity. Using a rich micro database for Canada, we show that the actual effect of R&D on productivity depends on a number of factors that play important roles in determining R&D efficiency in improving productivity. These factors include adopting certain management practices, making investments in ICT, and maintaining a skilled workforce. In addition, the article shows that firm size, foreign ownership and market power are important positive forces in improving R&D efficiency. The findings highlight the complexity of R&D in improving productivity, which calls for more sophisticated programs to encourage R&D activities and to improve R&D efficiency.

Suggested Citation

  • Jianmin Tang & Weimin Wang, 2019. "Is R&D Enough in Improving Firm Productivity?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 37, pages 120-143, Fall.
    • Handle: RePEc:sls:ipmsls:v:37:y:2019:5
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    More about this item

    Keywords

    Research and development; Innovation; Productivity;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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