Abstract
We investigated the relationship of research and development to higher productivity and industrial efficiency. After reviewing the economic literature and finding no conclusive evidence on this subject we then proceeded to test the hypothesis that R&D does in fact promote increases in productivity which may be expected to lead to higher earnings. We found that until 1963 output per manhour and R&D expenditures in manufacturing industries were significantly related. However, for the last quinquennium (1963–1968) no statistically significant relationship could be shown. The hypothesis that the lack of correlation in the last period was due to Federally financed projects was deemed incorrect. However, it is possible that the lack of correlation was due to a poor choice of projects by the private sector or to an increase in projects which were designed to raise profits by reducing tax liabilities or simply due to activities which emphasized product development rather than efficiency generating research.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Anonymous. 1971. “A Squeeze Hurts Lab Spending.” Business Week 2175 (May) 94.
Brown, Murray. 1966. On the Theory of Measurement of Technological Change. Cambridge: Cambridge University Press.
— and A. H. Conrad. 1967. “The Influence of Research and Education of CES Production Relations,” in M. Brown, ed. The Theory and Empirical Analysis of Production. New York: National Bureau of Economic Research 341–372.
Fellner, William. 1970. “Trends in the Activities Generating Technological Progress.” American Economic Review 60 (March) 1–29.
Griliches, Zvi. 1965. “Discussion of Mansfield’s Rate of Return From Industrial Research and Development.” American Economic Review 55 (May) 344–345.
Kendrick, John W. 1961. Productivity Trends in the United States. Princeton: National Bureau of Economic Research.
Leonard, William N. 1971. “Research and Development in Industrial Growth.” Journal of Political Economy 79 (March/April) 232–256.
Mansfield, Edwin. 1965. “Rates of Return from Industrial Research and Development.” American Economic Review, 55 (May) 310–322.
—. 1968. Industrial Research and Technological Innovation: An Econometric Analysis. New York: W. W. Norton & Co.
Minasian, Jora R. 1962. “The Economics of Research and Development,” in The Rate and Direction of Inventive Activity: Economic and Social Factors, Princeton: National Bureau of Economic Research 93–141.
Nelson, Richard R. 1965. “The Allocation of Research and Development Resources: Some Problems of Public Policy,” in R. A. Tybout, ed., Economics of Research and Development. Columbus, Ohio State University 288–306.
Nerlova, Marc. 1967. “Recent Empirical Studies of the CES and Related Production Functions,” in M. Brown, ed. The Theory and Empirical Analysis of Production. New York: National Bureau of Economic Research 55–122.
Solo, Robert A. 1962. “Gearing Military R&D to Economic Growth.” Harvard Business Review 50 (November/December) 49–60.
——— 1970. “Military R&D: A Drag on the Economy,” in J. L. Clayton, ed., The Economic Impact of the Cold War. New York: Harcourt, Brace and World 157–164.
Terleckyj, Nestor E. 1960. “Sources of Productivity Advance. A Pilot Study of Manufacturing Industries 1899–1953.” Unpublished doctoral dissertation. New York: Columbia University.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Leet, D.R., Shaw, J.A. The consequences of public and private research and development. JAMS 1, 138–147 (1973). https://doi.org/10.1007/BF02722017
Issue Date:
DOI: https://doi.org/10.1007/BF02722017