R&D activity and cross-country growth comparisons

Abstract

We use cross-national data on real GDP per capita, obtained from the Penn World Table (Mark V), and on expenditures for R&D and the number of scientists and engineers engaged in R&D per capita, taken from UNESCO Statistical Yearbooks, covering the period 1960-88. We find that R&D activity is significant in explaining cross-national differences in growth only among the more developed countries. Among middle income and less developed ones, the effects are insignificant. Our analysis also suggests that R&D activity has changed in importance over time, with returns to R&D diminishing sharply between the 1960s and 1970s, followed by a modest recovery in the 1980s. (c) 1995 Academic Press, Inc. Copyright 1995 by Oxford University Press.