The Two Disjointed Faces of R&D and the Productivity Gap in Europe

This paper explores the determinants of productivity gaps within European Union in computing, chemicals, basic metals and food manufacturing – four sectors that vary terms intensity sectoral R&D. Our analysis reveals main causes these are unembodied or disembodied R&D activity embodied purchased equipment machinery, their interplay. While both associated positively to closing gaps, interaction between two does not have same effect. There is no complementarity technology acquisition modes, despite crucial for catch up. In a policy context, this suggests possible lack coordination transfer (that is, foreign direct investment, trade industrial policy). We show, also, gap ‘peripheral’ (southern eastern) ‘north’ EU countries widening.