Abstract
The fraction of R&D-active firms decreased in Switzerland but increased in the Netherlands from 2000-2016. This paper examines reasons for this divergence and its impact on productivity growth. Our micro-data reveal R&D concentration among high-productivity firms in Switzerland. Innovation support sustains firms’ R&D activities in both countries. Our structural growth model identifies the impact of innovation, imitation and R&D costs on firms’ R&D decisions. R&D costs gained importance in Switzerland but not in the Netherlands, explaining the diverging R&D trends. Yet, counterfactual analyses show that policies should prioritize enhancing innovation and imitation success over cost reduction to boost productivity growth.
| Original language | English |
|---|---|
| Publisher | Centre for Economic Policy Research (CEPR) |
| Volume | DP184557 |
| Publication status | Published - 2023 |
Keywords
- R&D, innovation, imitation, R&D costs, policy, productivity growth, traveling wave