Erasmo Papagni

R&D and the growth of firms: empirical analysis of a panel of Italian firms ☆

Abstract This paper deals with the growth of firms and with their innovative activities. The main hypothesis of the paper maintains that firms with a strong commitment to R&D have a higher rate of growth because they succeed in the product market. After a review of the related literature, the paper presents an econometric analysis of the R&D-growth of firms relation based on a database of Italian firms. Data on a sample of 500 firms, with time series in the range 1989–1997, were drawn from the Mediocredito survey of Italian manufacturing. Descriptive analysis shows that the sales growth rate of firms with R&D is higher than that of firms without R&D. Econometric analysis is performed in two steps. First we apply a panel unit root test [Im, K., Pesaran, H., Shin, Y., 1997. Testing for Unit Roots in Heterogeneous Panels, DAE, University of Cambridge, Mimeo] to verify whether the firm size significantly affects firm growth. The test confirms Gibrat’s Law that firm size has a stochastic trend. Second, we explore whether there are variables with stochastic trends that could account for firm size. According to our estimates the growth rate of firms is positively correlated with research intensity. In these estimates, a further interesting result is that investment in ICT is not significant or shows a parameter with negative sign.

Public expenditure, corruption, and economic growth: the case of Italy

Abstract Public services and goods provide necessary inputs into private productive activities. Modern states finance these inputs through taxes collected from the community. When this process is influenced by bureaucratic corruption, the efficiency of public expenditure decreases. In this paper, we investigate the long-run consequences of this form of corruption. In a model of economic growth with public inputs used in private production, government bureaucrats purchase inputs from the private sector with some degree of discretion. Illegal agreements allow personal profit, and governments fight corruption through costly monitoring of public purchases. The extent of corruption is a decision variable in the maximization of expected revenue. The model is supported by econometric analysis of the Italian case. A dynamic panel data approach to economic growth based on data of 20 regions allows us to estimate the effect of corruption on the productivity of expenditure on public investment. The effect is significant and distinct from a direct negative effect of corruption on the growth rate.

Is the ‘Globalization’ of Science Always Good for Scientific Productivity and Economic Growth?

Modern science is characterized by an increasing trend in collaborations and interactions among researchers. This paper aims to analyse the effects of this phenomenon on the productivity of the science sector and on the growth rate of the economy. Basic research is modelled as a contest where only those who arrive first at an innovation obtain the reward and where the interactions among researchers do contribute to production of scientific knowledge. An important result is that when interactions are significant multiple steady states emerge. Hence the ‘science globalization’ process could have enhanced the heterogeneity among scientific sectors of different countries. When there are low interactions, policies that increase connectivity could have low or even perverse effect at improving the efficiency of science, the contrary happens in high connectivity environments.

Scientific research, externalities and economic growth

Innovation, Unemployment and Policy in the Theories of Growth and Distribution increases our understanding about the more relevant economic determinants and policy aspects of the interdependence between economic growth and income distribution.