November 17, 2007

R&D Stocks, TFP and Labor Shares

Today I started to work on my ASP/dissertation essay on tech transfer in Eastern Europe through various diffusion channels. Basically, before I left for Italy I already have computed the R&D stocks for the countries that are spreading technology (basically OECD nations) using the perpertual inventory method with a 10 percent annual depreciation and the initial stock computation given by Griliches (1979). Yesterday and again today I took it further: first computing the TFP as a Solow residual with the usual assumed shares for labor and capital in the production function (0.65 and 0.35)—which needs to be improved over time once I find out new sources for these figures—It is a bit complicated and tedious to computed all this and I have to do it in Excell since I have a lot of problems with missing observations or countries that have started later (in Eastern Europe etc). Capital is derived from the investment data available through WPenn Tables 6.2 and GDP at PPP US $ dollars. Lots of fun  as I already mentioned
Time: At least 20 to 30 hours of work. Coverage: very good for the whole sample.