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Corporate R&D and Productivity in Germany and the United Kingdom
The paper analyzes differences in research and development (R&D) spending and in the impact of R&D on productivity between German and UK firms. Using a dynamic production function approach, the authors find that the R&D output elasticity is approximately the same in both countries, implying a much larger rate of return on R&D in the UK than in Germany.
http://cep.lse.ac.uk/pubs/download/dp0599.pdf