Inter-industry Spillover of R&D, Technological Opportunities, and Productivity Growth

This paper attempts to examine the empirical significance of the technological opportunities and spillover effects in the relationship between industrial R&D and productivity growth. Estimation results are in favor of the general hypothesis that a given level of investment in knowledge stock will have a greater effect in industries with relatively rich technological opportunities. However, The explicit consideration of the spillover effects does not lead to a significant improvement in estimation results. Analytically, as Scherer(1982) argues, spillover effects should play an important role in explaining output elasticity. but the results of empirical tests in this paper suggest that the information in the spillover effects is embodied in its own R&D.