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The Productivity Effects of Internal and External R&D: Evidence from a Dynamic Panel Data Model *
Author(s) -
Lokshin Boris,
Belderbos René,
Carree Martin
Publication year - 2008
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/j.1468-0084.2008.00503.x
Subject(s) - complementarity (molecular biology) , panel data , economies of scope , productivity , scope (computer science) , economics , absorptive capacity , scale (ratio) , monetary economics , economies of scale , econometrics , microeconomics , industrial organization , macroeconomics , physics , biology , computer science , quantum mechanics , programming language , genetics
We examine the impact of internal and external R&D on labour productivity in a 6‐year panel of Dutch manufacturing firms. We apply a dynamic panel data model that allows for decreasing or increasing returns to scale in internal and external R&D and for economies of scope. We find complementarity between internal and external R&D, with a positive impact of external R&D only evident in case of sufficient internal R&D. These findings confirm the role of internal R&D in enhancing absorptive capacity. The scope economies are accompanied by decreasing returns to scale at high levels of internal and external R&D. The analysis indicates that productivity grows by increasing the share of external R&D in total R&D.