Relationships between Investments in Science and Scientific Output: Evidence from Cross-National Panel Data
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Date
2010-06
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Publisher
The Ohio State University
Abstract
Economists have long emphasized the important role that new ideas play in promoting economic
growth. Since formal scientific discovery is an important source of new ideas, it plays a
potentially foundational role in the growth process. Due to its importance, a literature on the
determinants of scientific output and productivity has emerged. Most of this literature focuses
on the individual researcher or institution as the unit of analysis. Very little attention has been
paid to the determinants of scientific output at the country-level. Toward a better understanding
of the country-level relationship between investment in science and scientific output, this paper
uses panel data from the World Bank and OECD to estimate the elasticity of scientific output
with respect to investment in science. Our estimates range from 0.25 to 0.71. In addition to
these contemporaneous estimates, we present evidence that past investment is also related to
output. We conclude that there is an economically significant positive association between
investment in science and scientific output. A sensitivity analysis reveals that this conclusion is
quite robust. However, we make no attempt to establish causality, and problems with the data
and econometric difficulties dictate that our estimates should be interpreted with caution.