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What do we know about R&D spillovers and productivity? Meta-analysis evidence on heterogeneity and statistical power

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  • Ugur, Mehmet
  • Churchill, Sefa Awaworyi
  • Luong, Hoang M.

Abstract

As Mohnen (1996: 40) has indicated, research and development (R&D) externalities is a two-sided theoretical issue. Its ‘dark’ side concerns the under-investment problem caused by non-appropriability of R&D benefits. On the ‘bright’ side, R&D spillovers are a source of productivity gains. Both aspects have been invoked to justify public support for R&D investment directly and indirectly. To establish whether public support can be justified due to productivity gains from spillovers, we meta-analyse 983 productivity estimates for spillovers and 501 estimates for own-R&D from 60 empirical studies. Our findings indicate that the average spillover effect is: (i) positive but heterogenous and smaller than what is reported in most narrative reviews; (ii) usually smaller than that of own-R&D capital; (iii) too small to be practically significant when evidence with adequate statistical power is considered. Controlling for observable sources of heterogeneity and best-practice research, the meta-effect is insignificant in the full sample but significant and large among OECD firms/industries/countries. We discuss the implications of these findings for future research and public support for R&D investment.

Suggested Citation

  • Ugur, Mehmet & Churchill, Sefa Awaworyi & Luong, Hoang M., 2019. "What do we know about R&D spillovers and productivity? Meta-analysis evidence on heterogeneity and statistical power," Greenwich Papers in Political Economy 25423, University of Greenwich, Greenwich Political Economy Research Centre.
  • Handle: RePEc:gpe:wpaper:25423
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    Keywords

    Knowledge externalities; R&D spillovers; productivity; public policy; meta-analysis;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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