[Vol.29 No.3] Estimation of Korea’s Knowledge Production Function Considering Population Structure Change

Research Planning & Coordination Team(02-759-5490)

Author: Won-Kyu Kim(KIET)

 This paper estimates the respective knowledge production functions considering population structure change, using time series data for the 1970-2019 period and panel data including the 2003-2021 period and spanning 30 industries. Using the time series data, R&D intensity makes a positive effect on the TFP growth rate, but the effect declines due to a decreasing trend in the ratio of productive population to elderly one. A reduction in the TFP differential between the U.S. and Korea and the TFP’s decreasing returns to scale both have negative effects on the TFP growth rate. When using the panel data, the R&D intensity positively affects the TFP growth rate, but a decreasing trend in the difference between productive population ratio and elderly one reduces the positive effect of R&D intensity. According to the estimation by industrial group, the R&D intensity of R&D intensive groups can have positive effects on the TFP growth rate. By the way, that of the high R&D intensive group shows very lower effect than that of the medium R&D intensive group and, moreover, loses its statistical significance differently from the medium R&D intensive one. As for the other service group, its R&D intensity plays an important role in absorbing the technological spillover from other industries.

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