Convergence Across the Spectrum: R&D Intensity in Manufacturing Growth

Abstract Manufacturing exhibits convergence in labor productivity, but the pace of catch-up differs by research and development (R&D) intensity. Using country–industry data and the OECD R&D classification, I analyze convergence across low-, medium-, and high-R&D manufacturing industries. Estimates based on five-year growth regressions show robust catch-up throughout manufacturing, with convergence strongest in medium-R&D industries, followed by high-R&D and then low-R&D industries. Distributional evidence suggests that medium-R&D industries tend to begin in the middle of the productivity distribution, leaving greater room for adoption-driven upgrading, a pattern consistent with differences in capital intensity. These results refine prevailing accounts of sectoral convergence and imply that policies promoting technology diffusion and capability building in medium-R&D industries may be just as important for sustained productivity catch-up as policies aimed at frontier innovation.