Total Factor Productivity and R&D Capital in Manufacturing Industries


Jeong Yeon Lee and Jung Woo Kim

East-West Center Working Papers, Economics Series, No. 89


Honolulu: East-West Center

Publication Date: June 2006
Binding: paper
Pages: 16
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This study analyzes total factor productivity in manufacturing industries for a sample of OECD countries. The estimates of Malmquist indexes clearly indicate that research and development (R&D) capital is an important determinant of productivity growth in manufacturing industries. The empirical results also show that it is the pace, not the intensity, of R&D investment that is significantly related to the extent to which R&D capital formation contributes to output growth. Furthermore, this study finds that productivity gains in manufacturing industries depend importantly on R&D spillovers as well.