R&D and Product Dynamics

Tsutomu Miyagawa, Kazuma Edamura and Atsushi Kawakami ()

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: In endogenous growth models and mid-term business cycles as seen in the works of Romer (1987) and Comin and Gertler (2006), it is assumed that there are positive effects of product variety. Using product-firm level data, we examine these effects empirically. Using data from the Census of Manufacture, the Survey of Research and Development (R&D), and the Basic Survey of Japanese Business Structure and Activities, we construct a database that includes number of products, R&D expenditures, and data on firm performance. We find that the number of products in R&D firms is higher than that of non-R&D firms, and that R&D firms are more sensitive than non-R&D firms for product dynamics. In the Poisson regression model, we also observe positive effects of R&D activities on product dynamics in empirical studies. As the increase in product variety contributes to productivity growth, our empirical results support the government's policies for enhancing R&D activities.

Pages: 31 pages
Date: 2017-07
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ino, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:17101

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