Corporate R&D and productivity in Germany and the United Kingdom
Bond, S., Harhoff, D. & Van Reenen, J.
(2003).
Corporate R&D and productivity in Germany and the United Kingdom.
(CEP Discussion Papers 599).
London School of Economics and Political Science. Centre for Economic Performance.
(2003).
Corporate R&D and productivity in Germany and the United Kingdom.
(CEP Discussion Papers 599).
London School of Economics and Political Science. Centre for Economic Performance.
This paper analyzes differences in R&D spending and in the impact of R&D on productivity between German and UK firms. We confirm that German firms spend significantly larger amounts on R&D than their UK counterparts, even after controlling for firm size and industry effects. Using a dynamic production function approach, we find that the R&D output elasticity is approximately the same in both countries, implying a much larger rate of return on R&D in the UK than in Germany. We discuss several explanations for this result.