Mission-oriented R&D and growth of Japan 1988-2016: A comparison with  private  and public R&D

Thomas Ziesemer

Mission-oriented R&D and growth of Japan 1988-2016: A comparison with private and public R&D

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Abstract

We analyze the dynamic interaction of Japan's total factor productivity (TFP), GDP, stocks of domestic and foreign private and public as well as mission-oriented R&D, called GBARD in OECD statistics, in a vector-error-correction model (VECM) for Japan with stock data for the period 1987-2016. Permanent policy changes show the following main results: (i) GBARD as well as private and public R&D each encourage growth rates of the other R&D stocks and of TFP and GDP, and all have high internal rates of return; (ii) Japan's R&D policies affect and are affected by foreign R&D; in particular, Japan's public R&D has a positive impact on European private R&D, whereas other OECD countries' R&D has a negative one; (iii) permanent foreign public R&D changes are detrimental to Japan's growth of TFP and GDP. Japan's R&D policies should be supported by education policies enhancing especially the number of PhDs and IT personnel.

Original language	English
Publication status	Published - 20 Oct 2022

Publication series

Series	UNU-MERIT Working Papers
Number	034
ISSN	1871-9872

JEL classifications

f43 - Economic Growth of Open Economies
o19 - "International Linkages to Development; Role of International Organizations"
o47 - "Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence"
o53 - Economywide Country Studies: Asia including Middle East

Keywords

R&D
cointegrated vector-auto-regression model (VECM)
cointegration
productivity
growth

Access to Document

wp2022-034Final published version, 1.64 MBLicence: CC BY-NC-SA

https://www.merit.unu.edu/publications/wppdf/2022/wp2022-034.pdfLicence: CC BY-NC-SA

Cite this

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N2 - We analyze the dynamic interaction of Japan's total factor productivity (TFP), GDP, stocks of domestic and foreign private and public as well as mission-oriented R&D, called GBARD in OECD statistics, in a vector-error-correction model (VECM) for Japan with stock data for the period 1987-2016. Permanent policy changes show the following main results: (i) GBARD as well as private and public R&D each encourage growth rates of the other R&D stocks and of TFP and GDP, and all have high internal rates of return; (ii) Japan's R&D policies affect and are affected by foreign R&D; in particular, Japan's public R&D has a positive impact on European private R&D, whereas other OECD countries' R&D has a negative one; (iii) permanent foreign public R&D changes are detrimental to Japan's growth of TFP and GDP. Japan's R&D policies should be supported by education policies enhancing especially the number of PhDs and IT personnel.

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