Public and private R&D investments as complementary inputs for productivity growth

The purpose of this paper is to analyse the relationship between public and private research expenditures since can provide main information to policy makers to improve the economic performance of country. Data from Eurostat are used. The methodology applies econometric models based on regression analyses. The main results are: public research and development (R&D) expenditure is a complement for private R&D one but the latter has to be higher than the former to be a determinant for productivity growth of countries. These results can be affected by several factors concerning the structure and specificity of National System of Innovation. In addition, this research shows that the composition of public and private magnitude of national investment in research depends on the size and level of country development. Copyright © 2010 Inderscience Enterprises Ltd.