On the importance of R&D and ownership for productivity growth: Evidence from Norwegian Micro-Data 1976-85

The first part of this paper develops a semi-parametric growth accounting framework, which permits a simultaneous study of productivity changes, scale economies and market power, extending the approach developed by Hall (1988). The framework is consistent with the presence of quasi fixed-capital and requires only minimum restrictions on the technology. Applying this framework, the second part of the piper explores the impact of R&D investments and various ownership characteristics on changes in productivity at the establishment level, using a comprehensive set of Norwegian establishment data for the period 1976-85. On average I find no evidence for significant scale economies. There seems to be significant market power in only one out of five industries. R&D-investments are shown to have a positive impact on productivity, and yield a relatively high private rate of return. Corporate restructuring and public ownership do not seem to affect productivity