UNIVERSITÄT POTSDAM - Prof. Dr. Paul JJ Welfens

efficient, indicating that the premium on government-financed R&D is smaller, but still
quite large. GRILICHES / LICHTENBERG (1984) found that spillovers between academic
research and some types of government R&D and the private sector exist, but
they are smaller than those between firms themselves. ACS / AUDRETSCH /
FELDMAN (1994) concluded that small firms (particularly high-tech start-ups) might
benefit more from such spillovers. Furthermore, ADAMS (1990) found the output of
the academic science base is a major contributor to productivity growth, but the time
lag is approximately twenty years. The Internet creates new options for finding venture
capital, and it creates enormous opportunities in international R&D cooperation.
Connected to the controversy about privately or government-financed R&D are
other empirical findings concerning basic research. GRILICHES (1995) presents estimation
results where the basic research coefficient is highly significant and shows a
rather large size. He concluded that firms which spend a larger fraction of their R&D
on basic research are more productive and have a higher level of output relative to the
other measured inputs, including R&D capital, and that this effect is relatively constant
over time. Based on other estimation results and additional computations he concluded
that the premium for basic research over the rest of R&D is 3 to 1 as far as its impact
on productivity growth is concerned.
Secondly, one output of the innovation process can be used as a proxy variable
for technological change and innovation: patent applications or the stock of patents.
Such a proceeding has several advantages. On the one hand, this indicator variable
avoids a lot of technical data problems; e.g. unlike R&D stock measures, no artificial
depreciation rate must be assumed; on the other hand, it also includes the results of
other knowledge sources apart from explicit R&D activities. BUDD / HOBBIS (1989a)
estimated for UK manufacturing long-term output elasticities with respect to a constructed
stock of patents between 0.21 and 0.23. In a second paper, they estimated with
a slightly different approach long-term elasticities of patenting of 0.114 for France,
Germany and the United Kingdom, whereas the elasticity for Japan was 0.135 (BUDD
/ HOBBIS 1989b). For the West German business sector in the period from 1960 to
1990, JUNGMITTAG / WELFENS (1998) estimated an output elasticity of the real
patent stock of 0.23. For a longer time period from 1960 to 1996 and with a slightly
different approach, JUNGMITTAG / BLIND / GRUPP (1999) found output elasticities
of the patent stock lying between 0.16 and 0.19. Altogether, these results suggest that
the estimates of the output elasticities of the R&D stock and the patent stock are in
most cases very similar and that they contribute substantially to economic growth. The
Internet will stimulate growth in OECD countries to the extent it facilitates storage and
dissemination of knowledge on the one hand; on the other hand Internet technology
facilitates R&D specialization at the international level.
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