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Journal of Productivity Analysis

, Volume 47, Issue 3, pp 291–308 | Cite as

The contribution of research and innovation to productivity

Article

Abstract

This paper examines the impact of investment in research and innovation on Australian market sector productivity. While previous studies have largely focused on a narrow class of private sector intangible assets as a source of productivity gains, this paper shows that there is a broad range of other business sector intangible assets that can significantly affect productivity. Moreover, the paper pays special attention to the role played by public funding for research and innovation. The empirical results suggest that there are significant spillovers to productivity from public sector R&D spending on research agencies and higher education. No evidence is found for productivity spillovers from indirect public funding for the business enterprise sector, civil sector or defence R&D. These findings have implications for government innovation policy as they provide insights into possible productivity gains from government funding reallocations.

Keywords

Productivity Innovation Intangible assets Public funding 

JEL Classification

O3 O4 H4 

Notes

Acknowledgements

We thank the Productivity Commission and Melbourne Institute for providing us with their data on intangible investment. Financial support from the Australian Research Council (LP0884095) is gratefully acknowledged, as are helpful comments from three anonymous referees, Paula Barnes, Erwin Diewert, Dean Parham, Joonghae Suh and participants at the 2014 KDI Journal of Economic Policy Conference.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no competing interests.

Disclaimer

The views expressed in this paper are those of the authors. Any errors are our responsibility.

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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.The Australian Bureau of StatisticsSydneyAustralia
  2. 2.School of Economics & CAERUNSWSydneyAustralia

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