Why Don't Poor Countries Do R&D?
Using a global panel on research and development (R&D) expenditures, this paper documents that on average poor countries do far less R&D than rich as a share of GDP. This is arguably counter intuitive since the gains from doing the R&D...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/03/19266897/dont-poor-countries-rd http://hdl.handle.net/10986/17729 |
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okr-10986-177292021-04-23T14:03:40Z Why Don't Poor Countries Do R&D? Goñi, Edwin Maloney, William F. ACCOUNTING ALLOCATION APPROPRIATE TECHNOLOGY BANDWIDTH BASIC RESEARCH BENCHMARK BOND CAPITAL EXPENDITURES CAPITAL INVESTMENT COMPETITIVENESS COMPUTERS COVARIANCE MATRIX CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT RESEARCH ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC FRONTIER ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMICS RESEARCH ENFORCEMENT MECHANISMS ENTREPRENEURIAL SKILLS ESP ESTIMATORS EXOGENOUS VARIABLES EXPECTED RETURNS EXPENDITURE EXPENDITURES EXPORT MARKET EXTERNALITIES FACTORS OF PRODUCTION FINANCES FINANCIAL CONSTRAINTS FINANCIAL DEVELOPMENT FISCAL POLICY FIXED INVESTMENT FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GLOBAL COMPETITIVENESS GLOBAL GOVERNANCE GLOBALIZATION GOVERNMENT SPENDING GROWTH MODELS GROWTH RATE GROWTH THEORY HUMAN CAPITAL HUMAN INTERACTIONS HYPOTHESIS TESTING INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INDUSTRIAL ECONOMICS INDUSTRIAL RESEARCH INNOVATION INNOVATION POLICY INNOVATIONS INSTITUTIONAL BARRIERS INSTRUMENT INSURANCE INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY RIGHTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL STANDARDS INVENTION INVENTORY INVESTING INVESTMENT CLIMATES INVESTMENT DECISIONS INVESTMENT RATES IP LDCS LIQUIDITY LIQUIDITY CONSTRAINTS LOCALIZATION MACROECONOMICS MANUFACTURING MARGINAL PRODUCTIVITY MARKET FAILURES MARKET RETURNS METHODOLOGY MIDDLE INCOME COUNTRIES MODELING MONOPOLY NETWORKS NEW TECHNOLOGIES OPEN ACCESS PATENTS POLITICAL ECONOMY PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROPERTY RIGHTS PROPERTY RIGHTS PROTECTION PUBLIC SECTOR PUBLIC UTILITIES RATE OF RETURN RATES OF RETURN REAL GDP REGRESSION ANALYSIS RESEARCH INFRASTRUCTURE RESEARCH INSTITUTIONS RESEARCH POLICY RESEARCH WORKING PAPERS RESULT RESULTS SCIENTIFIC RESEARCH SHARE OF INVESTMENT STATISTICAL DATA STOCKS TECHNIQUES TECHNOLOGICAL ADVANCE TREASURY TRUST FUND URUGUAY ROUND USES WAGES WEALTH WEALTH OF NATIONS WEIGHTING WTO R&D Using a global panel on research and development (R&D) expenditures, this paper documents that on average poor countries do far less R&D than rich as a share of GDP. This is arguably counter intuitive since the gains from doing the R&D required for technological catch up are thought to be very high and Griffith et al (2004) have documented that in the OECD returns increase dramatically with distance from the frontier. Exploiting recent advances in instrumental variables in a varying coefficient context we find that the rates of return follow an inverted U: they rise with distance to the frontier and then fall thereafter, potentially turning negative for the poorest countries. The findings are consistent with the importance of factors complementary to R&D, such as education, the quality of scientific infrastructure and the overall functioning of the national innovation system, and the quality of the private sector, which become increasingly weak with distance from the frontier and the absence of which can offset the catch up effect. China's and India's explosive growth in R&D investment trajectories in spite of expected low returns may be justified by their importing the complementary factors in the form of multinational corporations who do most of the patentable research. 2014-04-10T20:05:36Z 2014-04-10T20:05:36Z 2014-03 http://documents.worldbank.org/curated/en/2014/03/19266897/dont-poor-countries-rd http://hdl.handle.net/10986/17729 English en_US Policy Research Working Paper;No. 6811 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific South Asia China India |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ALLOCATION APPROPRIATE TECHNOLOGY BANDWIDTH BASIC RESEARCH BENCHMARK BOND CAPITAL EXPENDITURES CAPITAL INVESTMENT COMPETITIVENESS COMPUTERS COVARIANCE MATRIX CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT RESEARCH ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC FRONTIER ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMICS RESEARCH ENFORCEMENT MECHANISMS ENTREPRENEURIAL SKILLS ESP ESTIMATORS EXOGENOUS VARIABLES EXPECTED RETURNS EXPENDITURE EXPENDITURES EXPORT MARKET EXTERNALITIES FACTORS OF PRODUCTION FINANCES FINANCIAL CONSTRAINTS FINANCIAL DEVELOPMENT FISCAL POLICY FIXED INVESTMENT FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GLOBAL COMPETITIVENESS GLOBAL GOVERNANCE GLOBALIZATION GOVERNMENT SPENDING GROWTH MODELS GROWTH RATE GROWTH THEORY HUMAN CAPITAL HUMAN INTERACTIONS HYPOTHESIS TESTING INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INDUSTRIAL ECONOMICS INDUSTRIAL RESEARCH INNOVATION INNOVATION POLICY INNOVATIONS INSTITUTIONAL BARRIERS INSTRUMENT INSURANCE INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY RIGHTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL STANDARDS INVENTION INVENTORY INVESTING INVESTMENT CLIMATES INVESTMENT DECISIONS INVESTMENT RATES IP LDCS LIQUIDITY LIQUIDITY CONSTRAINTS LOCALIZATION MACROECONOMICS MANUFACTURING MARGINAL PRODUCTIVITY MARKET FAILURES MARKET RETURNS METHODOLOGY MIDDLE INCOME COUNTRIES MODELING MONOPOLY NETWORKS NEW TECHNOLOGIES OPEN ACCESS PATENTS POLITICAL ECONOMY PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROPERTY RIGHTS PROPERTY RIGHTS PROTECTION PUBLIC SECTOR PUBLIC UTILITIES RATE OF RETURN RATES OF RETURN REAL GDP REGRESSION ANALYSIS RESEARCH INFRASTRUCTURE RESEARCH INSTITUTIONS RESEARCH POLICY RESEARCH WORKING PAPERS RESULT RESULTS SCIENTIFIC RESEARCH SHARE OF INVESTMENT STATISTICAL DATA STOCKS TECHNIQUES TECHNOLOGICAL ADVANCE TREASURY TRUST FUND URUGUAY ROUND USES WAGES WEALTH WEALTH OF NATIONS WEIGHTING WTO R&D |
| spellingShingle |
ACCOUNTING ALLOCATION APPROPRIATE TECHNOLOGY BANDWIDTH BASIC RESEARCH BENCHMARK BOND CAPITAL EXPENDITURES CAPITAL INVESTMENT COMPETITIVENESS COMPUTERS COVARIANCE MATRIX CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT RESEARCH ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC FRONTIER ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMICS RESEARCH ENFORCEMENT MECHANISMS ENTREPRENEURIAL SKILLS ESP ESTIMATORS EXOGENOUS VARIABLES EXPECTED RETURNS EXPENDITURE EXPENDITURES EXPORT MARKET EXTERNALITIES FACTORS OF PRODUCTION FINANCES FINANCIAL CONSTRAINTS FINANCIAL DEVELOPMENT FISCAL POLICY FIXED INVESTMENT FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GLOBAL COMPETITIVENESS GLOBAL GOVERNANCE GLOBALIZATION GOVERNMENT SPENDING GROWTH MODELS GROWTH RATE GROWTH THEORY HUMAN CAPITAL HUMAN INTERACTIONS HYPOTHESIS TESTING INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INDUSTRIAL ECONOMICS INDUSTRIAL RESEARCH INNOVATION INNOVATION POLICY INNOVATIONS INSTITUTIONAL BARRIERS INSTRUMENT INSURANCE INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY RIGHTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL STANDARDS INVENTION INVENTORY INVESTING INVESTMENT CLIMATES INVESTMENT DECISIONS INVESTMENT RATES IP LDCS LIQUIDITY LIQUIDITY CONSTRAINTS LOCALIZATION MACROECONOMICS MANUFACTURING MARGINAL PRODUCTIVITY MARKET FAILURES MARKET RETURNS METHODOLOGY MIDDLE INCOME COUNTRIES MODELING MONOPOLY NETWORKS NEW TECHNOLOGIES OPEN ACCESS PATENTS POLITICAL ECONOMY PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROPERTY RIGHTS PROPERTY RIGHTS PROTECTION PUBLIC SECTOR PUBLIC UTILITIES RATE OF RETURN RATES OF RETURN REAL GDP REGRESSION ANALYSIS RESEARCH INFRASTRUCTURE RESEARCH INSTITUTIONS RESEARCH POLICY RESEARCH WORKING PAPERS RESULT RESULTS SCIENTIFIC RESEARCH SHARE OF INVESTMENT STATISTICAL DATA STOCKS TECHNIQUES TECHNOLOGICAL ADVANCE TREASURY TRUST FUND URUGUAY ROUND USES WAGES WEALTH WEALTH OF NATIONS WEIGHTING WTO R&D Goñi, Edwin Maloney, William F. Why Don't Poor Countries Do R&D? |
| geographic_facet |
East Asia and Pacific South Asia China India |
| relation |
Policy Research Working Paper;No. 6811 |
| description |
Using a global panel on research and
development (R&D) expenditures, this paper documents
that on average poor countries do far less R&D than rich
as a share of GDP. This is arguably counter intuitive since
the gains from doing the R&D required for technological
catch up are thought to be very high and Griffith et al
(2004) have documented that in the OECD returns increase
dramatically with distance from the frontier. Exploiting
recent advances in instrumental variables in a varying
coefficient context we find that the rates of return follow
an inverted U: they rise with distance to the frontier and
then fall thereafter, potentially turning negative for the
poorest countries. The findings are consistent with the
importance of factors complementary to R&D, such as
education, the quality of scientific infrastructure and the
overall functioning of the national innovation system, and
the quality of the private sector, which become increasingly
weak with distance from the frontier and the absence of
which can offset the catch up effect. China's and
India's explosive growth in R&D investment
trajectories in spite of expected low returns may be
justified by their importing the complementary factors in
the form of multinational corporations who do most of the
patentable research. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Goñi, Edwin Maloney, William F. |
| author_facet |
Goñi, Edwin Maloney, William F. |
| author_sort |
Goñi, Edwin |
| title |
Why Don't Poor Countries Do R&D? |
| title_short |
Why Don't Poor Countries Do R&D? |
| title_full |
Why Don't Poor Countries Do R&D? |
| title_fullStr |
Why Don't Poor Countries Do R&D? |
| title_full_unstemmed |
Why Don't Poor Countries Do R&D? |
| title_sort |
why don't poor countries do r&d? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/03/19266897/dont-poor-countries-rd http://hdl.handle.net/10986/17729 |
| _version_ |
1764438206494801920 |