We develop a simple estimator for production functions in the presence of endogenous productivity change that allows us to retrieve productivity and its relationship with R&D at the firm level. By endogenizing the productivity process we build on the recent literature on structural estimation of...

I develop a model of an R&D race with knowledge accumulation. My model does not inherit the memorylessness property of the exponential distribution that troubles existing models of R&D races. Hence, firms' knowledge stocks are no longer irrelevant to their behavior during the R&D race, and...