R&D and productivity in high-tech manufacturing: A comparison between Italy and Spain

Publication date: 30 Sep 2014 | Publication type: Journal article/book/chapter | Theme: Trade, Investment & Productivity | NIESR Author(s): Venturini, F | External Author(s): Sterlacchini, A. | Journal: Industry & Innovation No. 21 Vol. 5 | Pages: 359-379

Using data for twelve manufacturing industries over the period 1980-2006, we perform for Italy and Spain a dynamic panel estimation of the long-run elasticity of TFP with respect to R&D capital. In spite of recording a level of R&D capital lower than Italian industries, the technology-based industries in Spain have experienced a similar or higher long-run impact on TFP. This is mainly attributable to what occurred from the mid-1990s onwards when, thanks to increasing R&D efforts, the Spanish industries have been able to catch up with respect to the Italian ones. These findings suggest that, also in countries classified as technology followers, R&D investment is a crucial condition for boosting manufacturing productivity.