Depreciation Rate of R&D Capital: Panel Data Analysis of Listed Firms in Japanese R&D-Intensive Industries

Abstract

Research and development (R&D) capital is thought to be at the core of technological progress. To measure the effect of R&D capital correctly, the knowledge of its depreciation rate is required. However, few studies have paid attention to the depreciation rate of R&D capital for recent Japanese firms. This study estimates the depreciation rate of R&D capital by two methods using panel data of listed Japanese firms in R&D-intensive industries. The results show that the rates are higher than the conventionally accepted 15 percent and those estimated by previous studies for Japanese firms.