Services are the driving force in OECD economies, accounting for at least 70% of GNP in many countries. However, their potential contribution is hampered by government policies that were designed for manufacturing industries.
This study investigates the long-term effects of various types of R&D on multifactor productivity growth, which is the spillover effect of R&D. Econometric estimates are conducted on a panel of 16 OECD countries, over the period 1980-98. All results are averages over countries and time.