The purpose of this continuing award is to further investigate the relationship between research and development and economic growth. Earlier work on R&D at the level of the firm found a high private of rate of return to R&D, especially to its privately financed and basic research components. This earlier work was undertaken by the principal investigator and others looking at data for the U.S., France, and Japan. The research to be undertaken in this project will extend the international comparative analysis to incorporate parallel data sets on industrial R&D for Israel and Norway. A comparison of the impact of R&D at the level of the firm and at the more aggregated industry level will be undertaken in an effort to measure the discrepancy between the private and social returns to R&D. The main output of the project will be a volume tentatively entitled " R&D and Economic Growth". Besides summarizing the previous work on this topic, it will review the methodology involved in estimating rates of return from R&D, survey the work of other researchers on the same and related topics, integrate the results, and evaluate policy conclusions that emerge from the analysis.
