Sectoral R&D Activities and Knowledge Production Functions: A Study Using International Data

Abstract

This study explores the relationship between the stock of knowledge generated by sectoral groups of the economy, calculated using Research and Development (R&D) expenditure, and knowledge output as measured by official patent applications. Using sector-specific R&D expenditure data published by the OECD, we calculate the total domestic R&D spending across the manufacturing, non-manufacturing, government, and educational sectors. Constructing a consistent 15-year panel dataset for the 17 most significant countries in R&D, we employ econometric subsampling, various estimators, and consider different rates of knowledge depreciation. Our findings reveal that the stock of knowledge in the private manufacturing, government, and educational sectors has a robust positive effect on patent generation.

Keywords

• knowledge diffusion
• R&D
• patents
• panel data