R&D vs. Other Factor Inputs in a High-Tech Industry |
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Authors: | Pii Elina Berghäll |
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Affiliation: | Government Institute for Economic Research , Helsinki , Finland |
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Abstract: | According to knowledge-based growth theories, catch-up with the global technology frontier calls for a shift from physical investment to innovation. This prevailing premise in Finland is tested with an unbalanced panel of firms in Finnish information and communications technology (ICT) manufacturing, over a period of rapid growth, 1990–2003. Stochastic frontier model estimation results are overwhelmed by scale elasticity associated productivity growth. Contrary to beliefs, R&D productivity was relatively low, regardless if measured by efficiency impacts of R&D intensity, technical change or R&D elasticity of output. Results are consistent with industry outcomes and reveal internal causes to the subsequent downfall of ICT manufacturing in Finland. |
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Keywords: | Scale technical change efficiency R& D size |
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