Date of Award

12-2004

Degree Name

Doctor of Philosophy

Department

Economics

First Advisor

Dr. Eskander Alvi

Second Advisor

Dr. Debasri Mukherjee

Third Advisor

Dr. Kevin Corder

Abstract

This dissertation contains three essays on research and development (R&D): determinants, the role of fiscal policy, and the effects of government R&D on economic growth. The first essay is an attempt to study the determinants of aggregate R&D expenditure in both emerging and developed countries with special attention to patent rights protection and technology transfer. The main findings are: (1) patent protection helps R&D but overly burdensome protection can limit access to new innovations and thus slow down the rate of research and development, and (2) technology transfer, through imports and FDI, has a positive and significant effect only if the country depends heavily on FDI and imported intermediate goods.

The second essay presents a simple model of fiscal policy and business investment in research and development. In the theoretical model we study the effect of various fiscal variables on business R&D. On the empirical side, the fixed effects two stage least squares model, applied to a sample of 14 high-income OECD countries, shows the following effects on business R&D: (1) taxes on income and profits have the expected positive effect, (2) budget imbalances viathe interest rate channels has a negative effect, (3) government capital expenditure has a positive effect, and (4) taxes on goods and services are not significant.

The third essay contains an empirical study to estimate the social rate of return to government and business R&D when the former is disaggregated into civil and defense R&D. Using a GMM method, we estimate a dynamic panel data model that consists of 13 high-income OECD countries. The results show that contrary to most empirical studies that report a social rate of return to total government R&D expenditure to be insignificantly different from zero, this paper finds that civil government R&D expenditure has a positive and significant effect on GDP per capita growth. Furthermore, we find that both civil government R&D for economic development programs and for general university funds have positive and significant effect on economic growth, while civil government R&D for health and environment programs is found to be insignificant. Defense R&D is found to have either insignificant or negative effect on economic growth.

Access Setting

Dissertation-Open Access

Share

COinS