Defense R & D, Technology, and Economic Performance: A Longitudinal Analysis of the U.S. Experience

Document Type

Article

Publication Date

1-1-1993

Abstract

This paper examines the issue of the impact of defense expenditure from a different perspective, i.e., in terms of the direct relationships between defense R & D and economic performance as well as the indirect relationships via the development of (1) technical and scientific skills and (2) new technol-ogy. The model was estimated for the period 1955–1988 on a time-series set measured as elasticities. The effect of defense R & D is observed particularly through technological change as measured by the number of patents granted to U.S. organizations and individuals. There is no statistically significant evidence of resource diversion or “crowding effect” on the civilian economy due to defense R & D. Similarly, there does not seem to be any statistically visible evidence of direct effect from defense R & D to the economy. Interestingly, the non-R & D aspect of defense spending appears to have no statistically significant effect on the major components of civilian economic perfor-mance technical-skills formation or technological change. From a policy point of view, this suggests that technical spillovers may be limited to a specific kind of defense spending and not to defense spending in general. Another interesting implication is the rivalry between R & D and non-R & D defense spending in favor of the latter. © 1993 IEEE

Identifier

0027590755 (Scopus)

Publication Title

IEEE Transactions on Engineering Management

External Full Text Location

https://doi.org/10.1109/17.277405

e-ISSN

15580040

ISSN

00189391

First Page

136

Last Page

145

Issue

2

Volume

40

Fund Ref

Pew Charitable Trusts

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