The transatlantic productivity gap: is R&D the main culprit?
The literature has pointed to different causes to explain the productivity gap between Europe and United States in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate R&D investment, but also by a lower capacity to translate R&D investment into productivity gains. The proposed microeconometric estimates are based on a unique longitudinal database covering the period 1990-2008 and comprising 1,809 US and European companies for a total of 16,079 observations. Consistent with previous literature, we find robust evidence of a significant impact of R&D on productivity; however – using different estimation techniques – the R&D coefficients for the US firms always turn out to be significantly higher. To see to what extent these transatlantic differences may be related to the different sectoral structures in the US and the EU, we differentiated the analysis by sectors. The result is that both in manufacturing, services and high-tech sectors US firms are more efficient in translating their R&D investments into productivity increases.
Ciudad Politécnica de la Innovación | Edificio 8G, Acceso A, Planta 4ª (Sala Innova. Cubo Verde)
Universidad Politécnica de Valencia | Camino de Vera s/n
Full Professor, Catholic University of Milano
Research Fellow at IZA, Bonn
Honorary Professor at SPRU, University of Sussex
Marco Vivarelli, (http://sites.google.com/site/mvivarel/home), Ph.D. in Economics and Ph.D. in Science and Technology Policy, is full professor at the Catholic University of Milano; Research Fellow at IZA, Bonn and Honorary Professor at SPRU, University of Sussex.
Since 2002 to 2005 he has been Senior Research Economist at the ILO-Geneva. Since 2007 to 2009 he has been Senior Scientist at the JRC-IPTS, European Commission, Seville.
He is Editor-in-Chief of the Eurasian Business Review, Associate Editor of Small Business Economics, Associate Editor of Industrial and Corporate Change and referee for many international journals.
He is author/editor of various books and his papers have been published in journals such as Applied Economics, Cambridge Journal of Economics, Economics Letters, Industrial and Corporate Change, International Labour Review, International Journal of Industrial Organization, Journal of Economics, Journal of Evolutionary Economics, Oxford Bulletin of Economics and Statistics, Research Policy, Small Business Economics, Southern Economic Journal, World Development.
His research interests include: the determinants and consequences of R&D and innovation activities; the labour market and income distribution impacts of globalization in developing countries; the entry and post-entry performance of newborn firms.