Document Type




Format of Original

9 p.

Publication Date

Spring 1988


Walton College Center for Business and Economic Research

Source Publication

Arkansas Business and Economic Review

Source ISSN



A study was conducted to directly test the presence of causal relationship between changes in research and development (R&D) expenditure and productivity growth. Granger causality tests are performed using annual time series data for the period 1956-1983. Three measures of productivity are used -- National Income, National Income per person employed, and National Income per hour of work in the nonresidential business sector. Results show that changes in R&D expenditure affect the growth rate of the 3 productivity measures with different degrees of intensity. National Income per hour of work shows the highest growth rate, with the peak effect occurring in the 2nd year and maintaining a high growth rate through the 4th year. National Income shows the 2nd highest growth rate. The growth rate of all 3 measures decreases significantly in the 4th year. These results suggest that when projecting economic growth, planners should take R&D investment levels into account.


Published version. Arkansas Business and Economic Review, Vol. 21, No. 2 (Spring 1988): 19-27. Publisher link. © 1988 University of Arkansas, College of Business Administration, Bureau of Business and Economic Research. Used with permission.

Abdur Chowdhury was affiliated with Bentley College at the time of publication.

Included in

Economics Commons