We use panel data for nine industries to evaluate research and development (R&D) investments in New Zealand over the past forty years.
We estimate the impact of R&D stocks in a particular industry on output per person in that industry and on output per person in the rest of the economy. We examine both public and private R&D investments.
Privately provided R&D has a statistically significant positive impact on own-industry output per person, suggesting it increases productivity. However, publicly provided R&D has no impact on own-industry output per person. There is also evidence that private R&D in certain industries positively affects output per person in the rest of the economy, i.e. it generates positive spillovers. There is no evidence of positive spillovers from publicly provided R&D.
Johnson, Robin; Weshah A. Razzak and Steven Stillman. 2007. "Has New Zealand Benefited from Its Investments in Research and Development?" Applied Economics, 39:19, pp. 2425-2440.