R&D investment, productivity and rates of return: A meta-analysis of the evidence on OECD firms and industries

The volume of work on productivity effects of research and development (R&D) investment has expanded significantly following the contributions of Zvi Griliches and others to microeconometric work in late 1970s and early 1980s. This study aims to meta-analyse the research findings based on OECD firm and industry data, with a view to establish where the balance of the evidence lies and what factors may explain the variation in reported evidence. Drawing on 1,262 estimates from 64 primary studies, we report that the average effect of R&D capital on productivity and the average rate of return on R&D investment are both positive, but smaller than the summary measures reported in previous narrative reviews and meta-analysis studies. We also report that a range of moderating factors have significant effects on the variation among productivity and rates-of-return estimates reported in primary studies. Moderating factors with significant effects include: (i) measurement of inputs and output; (ii) model specifications; (iii) estimation methods; (iv) levels of analysis; (v) countries covered; and (vi) publication type among others.