Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298341 
Year of Publication: 
2023
Series/Report no.: 
Discussion Papers No. 1005
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper revisits the estimation of private returns to R&D. In an extension of the standard approach, we allow for endogeneity of production decisions, heterogeneity of R&D elasticities, and asymmetric treatment of intramural and extramural R&D. Our empirical analyses are based on an extended Cobb-Douglas production function that allows for firms with zero R&D capital, which is especially useful for studying firms' transition from being R&D-non-active to becoming R&D-active. Using a large panel of Norwegian firms observed in the period 2001-2018, we estimate the average private net return to be in the range 0-5 percent across a variety of model specifications if we treat intra- and extramural R&D symmetrically. If in compliance with the Frascati manual, we treat intramural R&D as investment and extramural R&D as intermediate input, the estimated net return increases to 5-10 percent.
Subjects: 
Returns to R&D
Intramural R&D
Extramural R&D
Capitalization of R\&D
Dynamic panel data models
GMM
JEL: 
C33
C52
D24
O38
Document Type: 
Working Paper

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