Capital, Labour, Material and R&D Investment in Japan: The Issue of Double-Counting
Annales d'Economie et de Statistique, Vol. 58, No. 7, pp. 165-184, 2000
20 Pages Posted: 31 May 2011
Date Written: May 30, 2000
Abstract
R&D components are investigated in dynamic factor demand models using pooled Japanese data. Models without R&D, with R&D (double or) wrongly counted and (once or) correctly counted are compared by means of GMM estimates, (non-)nested GMM tests and residual analyses. The results indicate that R&D contributes significantly to the explanation of capital, labour, energy and materials demand in the Japanese manufacturing industry. Double-counted R&D is even preferred to not incorporating R&D as a separate production factor. After including R&D as a production factor and correcting for double-counting, there is however no unambiguous answer to the question which model utilizes the information of R&D best.
Keywords: factor demand, research and development, investment, capital, labour
JEL Classification: C32, D21, D92, R32
Suggested Citation: Suggested Citation