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What do we know about R&D spillovers and productivity?

Goldsmiths, University of London

Room Laurie Grove Baths building room 107, Goldsmiths, University of London, New Cross, London SE14 6NW
10 Oct 2019 5 p.m. – 6 p.m.

The Institute of Management Studies at Goldsmiths, University of London, is hosting a research seminar by Prof Mehmet Ugur (University of Greenwich) and Dr Hoang Minh Luong (Queen's University Belfast), to present their co-authored paper.

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.