We present semi-endogenous growth models with productivity as functions
of domestic and foreign private and public R&D. In a small country case
with a Cobb-Douglas productivity production function, foreign R&D drives
steady-state growth and the production function can be a long-term
relation in a vector-error-correction model (VECM). Marginal
productivity conditions can be long-term relations for a
vector-error-correction model if the functional form is of a VES
function generalising a CES function. Combining the marginal products of
VES functions with recent evidence from VECMs for five countries shows
that private and public R&D have a positive effect on productivity
(except for France), and a negative R&D augmenting technical change. In
case of a VES function, steady states with constant R&D/productivity
ratios exist only for special cases of parameter restrictions, which are
not supported by the evidence.
Keywords: Productivity, endogenous (un)balanced growth, public R&D expenditure, foreign spillover.
JEL Classification: O38, O40, O41, H54, H87