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The role of R&D and knowledge spillovers in innovation and productivity

Audretsch, D. B. and Belitski, M. (2020) The role of R&D and knowledge spillovers in innovation and productivity. European Economic Review, 123. 103391. ISSN 0014-2921

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To link to this item DOI: 10.1016/j.euroecorev.2020.103391


The use of both research and development (R&D) and knowledge spillovers has been identified as the source of relative innovation underperformance in Europe vis-à-vis the United States. In this paper, we investigate R&D and knowledge spillovers at the firm level to evaluate the extent to which they complement innovation and firm productivity. We use data on a large unbalanced panel of 9,213 UK firms constructed from six consecutive waves of a community innovation survey, an annual business registry survey and a business enterprise research and development survey during 2002-2014. We estimate the knowledge spillover-augmented version of the CDM model of R&D, innovation, and productivity to find that complementarities between R&D and knowledge spillovers are strongly associated with firm productivity rather than firm innovation. R&D is important for both innovation and productivity, while knowledge spillovers are more important than R&D for firm productivity. We also explore the differences between returns to R&D and knowledge spillovers across three distinctive innovation strategies.

Item Type:Article
Divisions:Henley Business School
Science > School of the Built Environment > Construction Management and Engineering > Transition Pathways to a Low-Carbon Economy
ID Code:88863

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