In this paper we estimate the dynamic relationship between resources used in R&D by some OECD countries and their innovation output as measured by patent applications. We first estimate a long-run cointegration relation using recently developed tests and panel estimation techniques. We find that...

The importance of innovation for the economic performance of industrialized countries has been largely stressed recently by the theoretical and empirical literature. Moreover the intensity of knowledge externalities in generating innovation, is the key parameter in determining sustained growth...