This paper examines causality between R&D (public R&D and private R&D) and labor productivity and total factor productivity (TFP) by utilizing yearly data from 1970 to 2009. After cointegration tests, there were found cointegration between (i) privatelly financed R&D and publictly financed R&D, (ii) privately financed R&D and labor productivity. Error correction models were utilized for these two cointegration relationships, and Granger-causality were conducted for the others. Publicly financed R&D causes privately financed R&D, and the reverse was not supported. Privately financed R&D and labor productivity had bilateral Granger-causality. While privately financed R&D and publicly financed R&D had Granger-causality with TFP respectively, the reverse was not supported. Overall, the role of public R&D is important by directly impacting productivity (labor productivity and TFP) and indirectly impacting on productivity via private R&D.