Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2011:27: Internal and External R&D and Productivity – Evidence from Swedish Firm-Level Data

Karin Bergman ()
Additional contact information
Karin Bergman: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: This paper uses a panel of Swedish manufacturing firms to examine the effects of internal and external R&D on total factor productivity over the period 1991-2004. The findings give some support to the notion of complementarity between internal and external R&D, especially in industries with high R&D intensities, and suggest that the employees’ level of education is important for the firm’s capabilities to absorb external R&D. However, external R&D is generally found to have a negative effect on productivity and internal R&D is only significant when not including interaction terms between internal R&D and external R&D or human capital.

Keywords: Internal R&D; external R&D; productivity; Sweden

JEL-codes: D24; L24; O32

25 pages, September 20, 2011

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