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Does research and development capital affect total factor productivity? Evidence from Greece

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  • Ioannis Voutsinas
  • Constantinos Tsamadias

Abstract

The purpose of this study is twofold: Firstly, it investigates the relationship between the research and development (R&D) capital and the total factor productivity (TFP) of the Greek economy over the period 1981-2007. Secondly, it presents an overview of relevant empirical studies. It applies the Johansen methodology to estimate cointegrating vectors and uses vector error correction models to examine causality and short-term dynamics. The results indicate the presence of a long-run relationship between the total R&D capital and TFP and between the public R&D capital and TFP. On the other hand, the private R&D capital is not significantly related to TFP. A 1% increase in total R&D capital raises TFP by 0.038%, whereas a 1% increase in the public R&D capital raises TFP by 0.075%. The productivity of the Greek economy could be enhanced by higher R&D expenditure combined with the necessary structural reforms to improve the efficiency of the innovation system.

Suggested Citation

  • Ioannis Voutsinas & Constantinos Tsamadias, 2014. "Does research and development capital affect total factor productivity? Evidence from Greece," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(7), pages 631-651, October.
    • Handle: RePEc:taf:ecinnt:v:23:y:2014:i:7:p:631-651
    DOI: 10.1080/10438599.2013.871169
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    References listed on IDEAS

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    1. repec:wip:wpaper:1 is not listed on IDEAS
    2. Luintel, Kul B & Khan, Mosahid & Theodoridis, Konstantinos, 2010. "How Robust is the R&D-Productivity relationship? Evidence from OECD Countries," Cardiff Economics Working Papers E2010/7, Cardiff University, Cardiff Business School, Economics Section.
    3. Mosahid Khan & Kul B. Luintel & Konstantinos Theodoris, 2010. "How Robust is the R&D – Productivity relationship? Evidence from OECD Countries," WIPO Economic Research Working Papers 01, World Intellectual Property Organization - Economics and Statistics Division, revised Dec 2010.
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    Citations

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    Cited by:

    1. Thomas H.W. Ziesemer, 2024. "Internal rates of return for public R&D from VECM estimates for 17 OECD Countries," Economic Change and Restructuring, Springer, vol. 57(5), pages 1-16, October.
    2. Fadzli Adam, 2020. "Foreign Capital and Domestic Productivity in Developing Countries: An Empirical Analysis," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(4), pages 288-297, December.
    3. Lopamudra D. Satpathy & Bani Chatterjee & Jitendra Mahakud, 2017. "Firm Characteristics and Total Factor Productivity: Evidence from Indian Manufacturing Firms," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 11(1), pages 77-98, February.
    4. Dierk Herzer, 2022. "An Empirical Note on the Long-Run Effects of Public and Private R&D on TFP," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 3248-3264, December.
    5. Ioannis Voutsinas & Constantinos Tsamadias & Elias Carayannis & Christos Staikouras, 2018. "Does research and development expenditure impact innovation? theory, policy and practice insights from the Greek experience," The Journal of Technology Transfer, Springer, vol. 43(1), pages 159-171, February.
    6. Nicholas Tsounis & Ian Steedman, 2021. "A New Method for Measuring Total Factor Productivity Growth Based on the Full Industry Equilibrium Approach: The Case of the Greek Economy," Economies, MDPI, vol. 9(3), pages 1-21, August.
    7. Thomas H. W. Ziesemer, 2024. "Public R&D and Growth: A dynamic Panel Vector-Error-Correction Model Analysis for 14 OECD Countries," Economies, MDPI, vol. 12(8), pages 1-33, August.
    8. Sharif, Naubahar & Chandra, Kevin & Mansoor, Athar & Sinha, Kirti Bhasin, 2021. "A comparative analysis of research and development spending and total factor productivity growth in Hong Kong, Shenzhen, Singapore," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 108-120.
    9. Hamza Çeştepe & Sezin Şıklı, 2024. "An Empirical Analysis of the Relationship between Research and Development Expenditures, Total Factor Productivity, and Economic Growth in Turkey," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul Journal of Economics-Istanbul Iktisat Dergisi, vol. 0(40), pages 121-133, June.
    10. Zoltán Lakner & Anna Kiss & József Popp & Zoltán Zéman & Domicián Máté & Judit Oláh, 2019. "From Basic Research to Competitiveness: An Econometric Analysis of the Global Pharmaceutical Sector," Sustainability, MDPI, vol. 11(11), pages 1-17, June.

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