Complementarity between private and public investment in R&D: A Dynamic Panel Data analysis

Sadraoui Tarek (1) , Naceur Ben Zina

1 URDEE - unité de recherche sur la dynamique économique et de l'environnement

This paper investigates the relationship between private and public investment in R&D, while taking into account the effect of several instruments policies such as subsidies and taxes. We design a new look of knowledge spillovers and R&D cooperation to explain the contribution of public and private R&D on growth. We propose a heterogeneous dynamic panel data model to consider the endogenous effect of R&D investment. We also distinguish between the estimated long and short run results. Our results based on a sample of 23 countries over the period 1992-2004 indicate that both public and private investments in R&D are complementary. By establishing an endogenous growth model, the estimates indicate that public and private R&D depends on the host country's human capital investment. Results indicate that foreign direct investment is a more significant spillover channel than imports.

Mots clés: R&D investment; Technology Spillovers; Complementarities; Economic growth; Dynamic Panel Data; Cointegration; Unit root test; Private investment; Public investment; R&D cooperation

Domaines: Econométrie de la finance [q-fin.ST]; Sciences de l'information et de la communication

Sadraoui Tarek, Naceur Ben Zina. Complementarity between private and public investment in R&D: A Dynamic Panel Data analysis. IAENG Conferences - WCE 2009 International Conference of Computational Statistics and Data Engineering, Jul 2009, London, United Kingdom. ⟨hal-00388525⟩