Three cheers for industry: Is manufacturing linked to R&D, exports, and productivity growth?

Alex Coad, Antonio Vezzani

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

Many industrialized countries in Europe and North America have experienced a steady decline in the manufacturing sector over the last few decades. Amid growing concerns that outsourcing and offshoring have destabilized European economies, policymakers have suggested that a large manufacturing sector can: i)boost R&D, ii)encourage exporting, and iii)raise productivity. We examine these claims. Non-parametric plots and regressions show a robust positive association between the manufacturing sector and Business Expenditures on R&D (BERD), while the relationship between manufacturing and exports or productivity is more elusive. Our results suggest that increasing the manufacturing value added share may lead to an overall higher R&D intensity, because the manufacturing sector generally has a higher R&D intensity than the non-manufacturing business sector, although manufacturing sector R&D does not seem to create externalities leading to higher non-manufacturing R&D.

Original languageEnglish
Pages (from-to)14-25
Number of pages12
JournalStructural Change and Economic Dynamics
Volume50
DOIs
Publication statusPublished - 2019 Sep
Externally publishedYes

Keywords

  • Exporting
  • Industrial
  • Industrial policy
  • Manufacturing sector
  • Productivity
  • R&D
  • Renaissance

ASJC Scopus subject areas

  • Economics and Econometrics

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