Mario Coccia
Consiglio Nazionale delle Ricerche (Italia) e Max Planck Institute of Economics (Germania)
CERIS-CNR
via Real Collegio, n. 30, 10024 Moncalieri (Torino)
Tel.: +39 011 68 24 925; fax : +39 011 68 24 966
m.coccia@ceris.cnr.it
 

Abstract: Governments in modern economies devote much policy attention to enhancing productivity and continue to emphasize its drivers such as investment in R&D. This paper analyzes the relationship between productivity growth and levels of public and private R&D expenditures. The economic analysis shows that the magnitude of R&D expenditure by business enterprise equal to 1.58% (% of GDP) and R&D expenditure of government and higher education of 1.06 (% of GDP) maximize the long-run impact on productivity growth. These optimal rates are the key to sustain productivity and technology improvements that are more and more necessary to modern economic growth.

Keywords: R&D investment, Productivity growth, Optimization