Technology, Human Capital and Productivity Growth : Should We Care About Threshold Effects? Evidence from a Panel of EU Industries

This paper assesses whether the linkages between R&D, human capital and productivity growth in a panel of EU manufacturing industries over the period 1980-2000 are affected by a critical level of human capital. To employ our data in efficient manner, the study makes use of a dynamic panel-based analysis, which determines endogenously the sample splitting procedure. The estimates indicate the presence of a threshold level based on the size-level of human capital. Countries with human capital levels above the threshold receive higher productivity growth benefits from higher R&D