Title: The relative impact of government and private R&D on productivity growth: a quantitative analysis

Authors: Kuen-Hung Tsai, Jiann-Chyuan Wang

Addresses: Department of Business Administration, National Taipei University, 151 University Rd., San Shia, Taipei 237, Taiwan. ' Chung-Hua Institution for Economic Research, 75 Chang-Hsing Road, Taipei, 106, Taiwan

Abstract: Although in recent years, the relative performance between government-funded and privately-financed R&D in a national science and technology policy setting has attracted significant attention in Taiwan, no statistical evidence on this issue has yet been provided. This paper, therefore, sets out to estimate the relative impact on productivity from these two sources of R&D funding by measuring the stock of R&D capital and developing an adjusted production function model. Our examination is based upon longitudinal data covering the period from 1981 to 2001, with the estimation showing that the impact on the growth of total factor productivity from privately-financed R&D is around three times that of government-funded R&D. Furthermore, the estimation also demonstrates that R&D investment has a significant effect on the enhancement of total factor productivity. Some implications arising from these findings are also provided by this study.

Keywords: R&D capital; total factor productivity; science policy; technology policy; research and development; productivity growth; Taiwan.

DOI: 10.1504/IJTPM.2004.006074

International Journal of Technology, Policy and Management, 2004 Vol.4 No.3, pp.210 - 217

Published online: 31 Jan 2005 *

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