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The Search for R&D Spillovers
... Jorgenson and Griliches (1967) argued that the advancement of a country is not solely dependent on the quantity of physical capital, labour, and land, the quality of these inputs is equally essential in the production process to achieve the resource efficiency. In later developments, Griliches (1992) and Romer (1991) concluded that economic output hinges on R&D innovation, knowledge spillovers, and the ability to absorb innovation, reflecting labor efficiency or knowledge capital. For improving absorptive capacity, talent is an essential factor, as young researchers with innovative knowledge will endorse the exchange of ideas and collaboration that increased the R&D spillover process (Wang, 2015). ...
... Within the framework of production function, the significance of R&D innovation has grown over time through novel-orientated studies on endogenous growth theories that positioned the R&D innovation as influential determinants of economic output (Aghion & Howitt, 1990). Furthermore, Griliches (1992) emphasised on R&D spillovers as a primary driver of economic output, fostering innovation and spillover shocks to cost-efficient and market-compatible products that enables firm or economy to secure comparative advantages. New growth theories heighten the role of R&D spillovers as catalysts for technological progress and innovation adoption in economic growth (Romer, 1990; Grossman & Helpman, 1991). ...
... Drawing insights from both international and domestic literature, this study concludes that there remains ambiguity regarding the contribution of R&D innovation to the economic growth of a country. A comprehensive review of studies suggested that R&D diffusion produces positive externalities and technological transformation, labour migration, and knowledge shocks are the key determinants to achieve long-term economic growth (Griliches, 1992;Keller, 2021;Rismawan et al., 2021). On the contrary, many studies argue that R&D spillovers produce negative externalities, such as increased unemployment, increased comparative cost of the industry, increased income inequality, elevated water and air pollution, reduced availability of organic food, and decreased domestic productivity (Aitken & Based on diverse literature, this study identifies key questions that have not been adequately addressed in the context of Pakistan. ...
Research and Development (R&D) based economic sustainability is the current debate in endogenous growth framework to solve the problem of production inefficiency to achieve economic stability. The high Total Factor Productivity (TFP) growth can be attained through technological innovation, reverse engineering, ‘learning by doing’, artificial intelligence, and interaction of the researchers around the world. The adoption of foreign and domestic R&D innovation and its spillovers are relying on the willingness to opt, financial capital, and knowledge capital. The rationale of this study is to examine the importance of R&D spillovers for stable economic growth (EG) through the channel of knowledge diffusion in Pakistan. This research theme has been designed to investigate the proficiency of R&D diffusions in the absorptive capacity of the Pakistani labour force and the efficiency to progenitive utilization of R&D innovation. Quantitative analysis is carried out through the yearly time series data covering the period of 1972 to 2022. The Translog and Cobb Douglas production functions were employed to measure the TFP growth and Autoregressive Distributive Lagged (ARDL) Model was applied for empirical analysis. The quantitative analysis provided evidence of the presence of foreign and domestic R&D innovation spillovers and adoption in Pakistan with poor absorptive capacity. The study has indicated that foreign R&D spillovers have an affirmative role in TFP growth compared to domestic R&D. A great deal of policy wisdom has been generated, which directs that government should focus on sustainable policies related to local R&D, R&D spillovers with sufficient and sustainable R&D expenditures, their availability, and accessibility of innovation to boost the resource efficacy for higher TFP growth. The government should emphasise the implementation of extension services to educate workers by demonstrating the effectiveness of early adoption of innovation, innovative technology, and artificial intelligence (AI) to achieve sustainable productivity.
... As an economic good, knowledge is characterized by its limited appropriability and exhaustibility. The limited appropriability of knowledge is at the origin of a market failure as it reduces the incentives to its generation and its undersupply, as well as spillovers that enable its use by third parties at no cost (Griliches, 1979(Griliches, , 1992. ...
... The technology production function is a classical Cobb-Douglas production function enriched by the inclusion of the endogenous stock of technological knowledge (T*). In the "technology production function" introduced by Griliches (1979Griliches ( and, 1992 the stock of technological knowledge enters as a third input: ...
This paper presents and frames the results of the recent book The creative response: knowledge and innovation by Antonelli and Colombelli (2023). The book combines the advances of the economics of knowledge and innovation, implementing the Schumpeterian notion of creative response to understand the determinants and the effects of the rate and direction of technological and organizational change and its variance across time and space, firms and industries. The notion of creative response, introduced by Joseph Schumpeter in the essay “The creative response in economic history” published in 1947 by The Journal of Economic History , can be regarded as the synthesis of his life-long work on innovation. It provides an inclusive framework that enables to highlight the crucial role of knowledge in assessing the rate and direction of technological change and to clarify that no innovation is possible without the generation of new knowledge, while the generation of new knowledge augments the chances of innovation but does not yield automatically the introduction of innovation. Firms thus are faced with a number of strategic decisions to make the creative response possible. The position paper elaborates the analytical core of the notion of creative response and articulates its implications for economic policy and strategic management.
... Jaffe et al. [1993] stated that due to the localization feature of knowledge, it is difficult for knowledge to spread among different regions. However, based on a variety of research, for example Krugman [1991], Griliches [1991], Coe and Helpman [1995], Anselin et al. [2000] and Paci and Usai [1999], we know that to some extent new knowledge is a kind of public goods and spillovers transcend political boundaries. Based on empirical studies in Bottazzi and Peri [2003], Monjon and Waelbroeck [2003], Fischer and Varga [2003] and Greunz [2003], we know that knowledge spillovers had a remarkable impact on regional innovations, and the influence dwindles as the distance between one region and another increases. ...
... where the rate of depreciation of R&D capital reserve δ is usually 10% in China, which is the actual R&D expense for each region per year and is converted into the R&D inputs measured by purchasing power in 2000 through the GDP deflater index. The R&D capital reserve in different regions in 2000 is calculated with the method proposed by Griliches [1991], that is K r,2000 = R 2000 g i +δ , where is the geometric average growth rate of R&D expense in different regions per year from 2000 to 2011, the unit of R&D expense is 10, 000 Yuan. The knowledge stock can be calculated in the same way. ...
This paper extends endogenous economic growth models to incorporate knowledge externality. We explores whether spatial knowledge spillovers among regions exist, whether spatial knowledge spillovers promote regional innovative activities, and whether external knowledge spillovers affect the evolution of regional innovations in the long run. We empirically verify the theoretical results through applying spatial statistics and econometric model in the analysis of panel data of 31 regions in China. An accurate estimate of the range of knowledge spillovers is achieved and the convergence of regional knowledge growth rate is found, with clear evidences that developing regions benefit more from external knowledge spillovers than developed regions.
... Books either directly via knowledge creation and knowledge transmission or indirectly via impacts on other inputs (labor quality, health, etc.) would contribute positively to economic growth. The research hypothesis draws on the broader literature on the determinants of economic growth (Barro & Sala-i-Martin, 2004;Ciccone & Jarociński, 2010;Jones, 1995Jones, , 2002, and somewhat more narrowly from the literature on the effects of knowledge flows and human capital (Dasgupta, 1988;Feldman, 1999;Galor & Weil, 2000;Geuna, 1999;Goel et al., 2016;Griliches, 1992). Our focus is complementary to that of Baten and van Zanden (2008), who study the effects of advanced literacy by employing the number of books per capita in preindustrial Europe. ...
... Furthermore, knowledge acquisition and resulting benefits are cumulative processes, with many of the benefits (both direct and indirect) accruing over time (Scotchmer, 1991). The determination spillovers of knowledge (and R&D), over time and across sectors/ regions, has been a challenge, as noted in his seminal piece by Griliches (1992). ...
This paper uses recent global data on book production to study their impacts on economic growth. Books are key inputs in human capital formation and knowledge flows/continuity, which impact economic growth. Our results, using data from nearly 100 nations over 2018–2021, show that books positively contribute to economic growth. This is true whether total books deposited in recognized repositories are used or when they are normalized by population. E-books are also shown to complement the effects of conventional books. The positive growth dividends over a period that encompasses the recent pandemic are insightful. In other results, internet access (and the degree of globalization) has complementary growth effects. Finally, the effects of some of the growth influences are shown to vary across the least- and most-growing nations.
... The "pure" knowledge spillovers, transmitted by conferences, scientific literature, labor mobility, patent information, or pure imitation (Griliches, 1992), are regarded as externalities of knowledge. A portion of the research, drawing upon Krugman's (1991) assertion that knowledge flows are invisible, has sought to indirectly quantify the impact of knowledge inflows through changes in economic indicators or innovation performance (Chen et al., 2022;Javorcik, 2004). ...
... Another view points out that patent citations are an imperfect measure of knowledge spillovers (Criscuolo & Verspagen, 2008). Initially, only a portion of research outcomes are patented and thus have the opportunity to be cited (Griliches, 1992). Second, inventors might not comprehensively list all prior knowledge underlying their invention in their citations. ...
This paper seeks to reconcile the divergent views on the role of proximity in knowledge spillovers through a comparative analysis of proximity's various dimensions and an examination of conditions under which proximity is effective. Our findings indicate that cognitive and social proximity not only mitigate the hindrance of geographical distance on knowledge diffusion but also play a dominant role in facilitating knowledge flows over long distances. Consequently, non‐geographical proximity has a more profound impact on knowledge spillovers, although the effect of geographical proximity remains significant and should not be overlooked. Through mechanistic analysis, we find that geographical proximity is effective in facilitating the diffusion of tacit knowledge, learning by firms with poorer knowledge stock, and searching for unfixed knowledge sources. The impact of geographical proximity on knowledge spillovers depends on a range of conditions, and appreciating this complexity is vital for an accurate comprehension of its role. In contrast, non‐geographical proximity exhibits greater robustness, as it faces fewer limiting conditions and possesses stronger explanatory power.
... This explains why lags exist between scientific knowledge and entrepreneurs' commercialization of ideas. This finding extends the work on knowledge spillovers (Acs et al. 2009;Griliches 1992;Scotchmer 1991) and on cycles in R&D and innovation (Ahmad and Zheng 2023;Archibugi et al. 2013;Barlevy 2007;Gabrovski 2020;Mand 2019;Ouyang 2011). ...
... While basic research is essential for applied research or technology, less is known about how much of basic research transfers/translates into applied research (Calvert 2006;Dasgupta and David 1994;Goel et al. 2023;Salter and Martin 2001). In other words, the speed (Hall et al. 1986) and scale of spillovers from basic to applied research are unknown, and they likely vary by industry, technology, and firm size (Audretsch and Feldman 1996;Feldman 1999;Griliches 1992;Haruna and Goel 2017). ...
To formally understand cyclicity in innovation and to tie to Schumpeter’s idea about waves of creative destruction, we elaborate upon Thomas Kuhn’s (1962) hypothesis that science evolves through a succession of paradigm life cycles by noting that entrepreneurs recognize the profitability of new scientific theories through a delay. The delay from innovation to entrepreneurship may be due to technological inertia, the time taken in recognizing the applications of basic research, or related to how quickly technological change evolves over time and its returns are realized. In our model, a profit-maximizing entrepreneur uses the latest scientific knowledge to create innovative technologies, which generates cycles between science and innovation. The necessary conditions for the existence of cycles are that human capital employed in science creation and high valued innovations is high, and the interest rate is low. The findings also tie to the notion about the variability of innovation over the business cycle and can provide useful inputs into the formulation of more effective technology policies.
... R&D-intensive local innovation systems can become 'innovation hotspots' with economies of scale and scope that attract R&D-active business enterprises and incentivize local universities to fully realize their innovation potential (WIPO, 2019). Local proximity effects may then arise because of research-intensive, innovative firms are agglomerating and clustering around such universities for reasons of cost-reduction and opportunities to benefit from R&D spillovers from the university or other business enterprises (Griliches, 1992;Jaffe, 1989). Increasing demand for connections into local universities from a growing population of innovative firms the concentration of high-technology industries may lead to a virtuous circle of university-business cooperation as has happened in the case of Stanford University and the San Francisco Bay area. ...
The academic research systems of China and the USA are characterised by different policies and practices with regards to university-business research cooperation (UBRC). To examine those differences, from the perspective of research-intensive universities, this study’s analytical framework focuses on university research outputs that involve collaboration with local business sector partners. More specifically, university-business co-authored publications with authors from a business enterprise located within a 50 km range of the university’s city of location (UBRC_50km publications). The study comprises 193 research-intensive universities in China and 179 in the United States. Regression modelling of each country’s UBRC_50km publication output levels comprise two models: (1) ‘internal’ research profiles of universities; (2) extended model with two ‘external’ variables related to characteristics of the local geographical area. The findings of model 1 show that the two university research systems seem fairly similar in terms of UBRC_50km output patterns. When external explanatory factors are included, some significant differences emerge: in the USA, UBRC_50km output is significantly affected by the total patent output of the local area (i.e. patents of universities and local firms) representing the local R&D system; in China, it’s the number of other large research-intensive universities located in the same city or metropolitan area, thus reflecting the positive effects of urban agglomeration and the local science system.
... Interestingly, the graph clearly shows that the local knowledge stock makes the effect of diversity on high-tech entrepreneurship turn from negative to positive. We interpret this result as a sign that a richer knowledge stock facilitates overcoming differences in culture, making knowledge exchange easier and enhancing knowledge spillovers (Griliches, 1992). At the same time, a broader knowledge stock produces more unexploited opportunities for high-tech entrepreneurship, and a more diverse set of cultures increases the ability of the local system to grasp them and to turn them into commercial ends. ...
This study investigates the role of cultural diversity and local knowledge stocks for entrepreneurship, focusing on the interplay between the two. We consider the Italian case, where immigration is comparatively low-skilled and originating largely from less advanced economies. Focusing separately on high-tech and low-tech entrepreneurship, we document the coexistence of heterogeneous effects of diversity for entrepreneurship. We find that cultural diversity promotes high-tech entrepreneurship only by high levels of knowledge stocks. In contrast, cultural diversity has a direct, positive effect on low-tech entrepreneurship that is negatively moderated by knowledge. We interpret these findings as the result of two different effects of diversity: diversity promotes high-tech entrepreneurship providing heterogeneous perspectives and evaluations of business opportunities; at the same time, it increases taste heterogeneity, offering low-tech business opportunities to necessity entrepreneurs which become less and less appealing as the knowledge stock of the region increases.
... A large literature characterizes innovation using measures of the R&D and patenting activity of firms (Griliches, 1992(Griliches, , 1998Hall, 1996). While inventors themselves have long been of interest (Winston, 1937;Schmookler, 1957), only recently have researchers been able to assemble large administrative datasets capable of characterizing the population of Content courtesy of Springer Nature, terms of use apply. ...
Innovation is a key driver of long-run economic growth. Studying innovation requires a clear view of the characteristics and behavior of the individuals who create new ideas. A general lack of rich, large-scale data has constrained such analyses. We address this by introducing a new dataset linking patent inventors to survey, census, and administrative microdata at the U.S. Census Bureau. We use this data to provide a first look at the demographic characteristics, employer characteristics, earnings, and employment dynamics of inventors. These linkages, which will be available to researchers with approved access, dramatically increase the scope of what can be learned about inventors and innovative activity.
... 9 Of the 132 countries considered, 15% are classified as "low income", 31% as "low middle income", 26% as "upper middle income", and 27% as "high income", using the most recent World Bank classifications. 10 The two key survey questions on firm innovative activity drawn from the Enterprise Surveys are as follows: ...
This study examines the impact of external obstacles, including utility disruptions and competitive pressures, on firms’ innovative activities. External obstacles can hamper innovation when innovation production is adversely impacted (supply side effect), while they can spur innovation when they create new demand (market) opportunities (demand side effect). Our results, using data across firms in 132 nations, support the demand side effect. Specifically, utility disruptions involving internet, power, and water disruptions spur innovation introductions, as do the competitive pressures from the informal sector and public sector firms. On the other hand, consistent with the extant theory, greater market competition lowers innovation introductions – a business stealing effect. The findings mostly hold across process and product innovation, the developing nations subsample, and the subset of large firms.
... Since R&D expenditures usually result in externalities, the firm's R&D spending that impacts its own-firm performance influences other firms, especially those with technology proximity. Griliches (1979, 1992, Griliches and Hausman 1986 concludes that firms with R&D investment reduce their costs, and cost-reducing technology spillovers also accrue to proximate firms. With access to a more robust data set, Chappell and Jaffe (2018) reports more detailed results. ...
This paper investigates the impact of inter-firm R&D and technology spillovers within three economies: the U.S., China, and Japan. For this purpose, the paper formulates a 4-equation system that measures the impact of spillovers on firm-level R&D expenditure, patent production, productivity, and the firm’s Tobin Q. Using a panel of firm-level data spanning the population of publicly traded firms in our 3-country sample over the period 2011–2019, firm-level fixed effects and seemingly unrelated regression estimates calibrate the substantial impact of technology spillovers. The paper consistently finds robust spillover effects for each of the three economies and for each of the dimensions of firm performance—R&D spending, patent production, productivity, and market value. For the stock of R&D, estimates show that the social returns to R&D spending are typically double or triple the private returns. Among differences across the three countries, the US and Japan tend to show relatively similar spillover magnitudes, while those for China are typically larger and the private returns are less. We attribute these differences to two factors. The first is rapid growth, a high rate of new entry, and relatively high competition within China’s fast-expanding industry; the second is the condition of relatively weak intellectual property rights across China’s economy.
... Here, the limited appropriability of knowledge reduces the incentives to produce new technological knowledge, leading to an undersupply of knowledge. In contrast, the technology production function elaborated by Griliches (1979Griliches ( , 1992 focuses on the positive effects stemming from the inability to retain all the knowledge returns. The knowledge that is not appropriated by its inventors spills over into the system and benefits third parties. ...
The new evidence provided by the codification of intangible assets in national accounts and firm statistics provides the opportunity to test the Schumpeterian creative response hypothesis according to which (i) the generation and exploitation of knowledge are characterized by high levels of risk, (ii) firms in equilibrium are reluctant to undertake risky activities, (iii) the farther away from equilibrium conditions, the stronger the firm’s willingness to introduce innovation, (iv) the creative response effect is heterogeneous across firm size, age, and industry technological content. Empirical evidence for publicly listed companies in the US during 1977–2016 confirms a U-shaped relationship between out-of-equilibrium performance and intangible intensity growth. Moreover, we estimate a deeper U-shaped relationship between performance and growth in intangibles intensity for small and young firms and, on average, for firms in high-tech industries. Our results are robust to different econometric tests performed on alternative samples. An original instrumental variable strategy further strengthens the validity of our results. We conclude that the firm creative response is an out-of-equilibrium phenomenon, stronger in the case of disappointing performances and sharper for small, young, and high-tech firms.
... Os transbordamentos geográficos localizados surgem devido à proximidade geográfica que facilita a interação e a comunicação dos agentes, diminuindo a busca por oportunidades de lucro, como aponta Feldman (1999). Os transbordamentos do conhecimento (spillovers) não ocorrem a longas distâncias, sendo um fenômeno regional que pode levar à concentração espacial (Griliches, 1992). ...
A inovação tem sido reconhecida como um dos pilares fundamentais para o desenvolvimento econômico e social no século XXI. Neste contexto, as incubadoras de empresas e os modelos de negócios emergem como instrumentos estratégicos para impulsionar a geração de riqueza e a transformação de ideias em soluções concretas para as demandas da sociedade. É com este propósito que apresentamos a primeira edição de Inovação, Incubadoras e Geração de Riqueza: Estudos Acadêmicos, uma obra que reúne pesquisas acadêmicas atuais sobre temas cruciais para o empreendedorismo e a competitividade regional. Este livro é composto por três capítulos, cada um dedicado a explorar diferentes aspectos desse ecossistema inovador. A seguir, apresentamos breves resumos do conteúdo que será abordado em cada um deles: 1. Incubadoras e inovação: uma análise espacial para os municípios do Paraná: Este capítulo examina a relevância das incubadoras na promoção da inovação nos municípios do estado do Paraná. Por meio de um modelo TOBIT espacial, o estudo identifica o impacto das incubadoras na produção de patentes, evidenciando como elas geram efeitos de transbordamento de conhecimento nas regiões circunvizinhas. Além disso, o texto discute fatores como a proximidade de centros produtivos e a interação entre empresas e instituições de ensino como elementos-chave para o desenvolvimento regional. 2. O perfil das incubadoras e incubadas no estado do Paraná: Com base em uma análise exploratória, este capítulo investiga as características das incubadoras e das empresas incubadas em três cidades paranaenses. Os resultados destacam a importância das incubadoras associadas a universidades, bem como os desafios enfrentados, como a dependência de recursos externos. A pesquisa revela, ainda, o papel do Modelo Cerne na estruturação e gestão dessas incubadoras, mostrando como elas contribuem para reduzir a mortalidade de startups e fomentar o empreendedorismo inovador. 3. Modelos de negócios: estratégia de plataforma e uma análise das demandas dos usuários: Este capítulo aborda os modelos de negócios baseados em plataformas digitais, com foco em uma empresa de educação a distância especializada no setor de trânsito. O estudo analisa as demandas dos parceiros comerciais e propõe estratégias para otimizar o atendimento e a experiência dos usuários. A pesquisa destaca a relevância da tecnologia como elemento integrador e potencializador de novas formas de criação de valor. Por meio de uma abordagem interdisciplinar, esta obra busca não apenas documentar estudos acadêmicos relevantes, mas também fomentar a reflexão sobre a construção de um ambiente mais favorável à inovação. Esperamos que este livro contribua para inspirar gestores, pesquisadores e empreendedores na busca por soluções criativas e sustentáveis que transformem o potencial das ideias em riqueza para a sociedade.
... It is also relevant to consider knowledge spillovers (i.e. when R&D conducted by one entity creates value for other entities without compensation to the innovator) and social rates of return (i.e. the total benefits to society from R&D investment, including both private returns to the innovator and spillover benefits to others). Multiplier effects are often measured through econometric analyses that quantify the relationship between an investment and direct and indirect outcomes over time [83,84]. Relevant variables include input measures (e.g. ...
Governments are increasingly employing funding for open source software (OSS) development as a policy lever to support the security of software supply chains, digital sovereignty, economic growth, and national competitiveness in science and innovation, among others. However, the impacts of public funding on OSS development remain poorly understood, with a lack of consensus on how to meaningfully measure them. This gap hampers assessments of the return on public investment and impedes the optimisation of public-interest funding strategies. We address this gap with a toolkit of methodological considerations that may inform such measurements, drawing on prior work on OSS valuations and community health metrics by the Community Health Analytics Open Source Software (CHAOSS) project as well as our first-hand learnings as practitioners tasked with evaluating funding programmes by the Next Generation Internet initiative and the Sovereign Tech Agency. We discuss salient considerations, including the importance of accounting for funding objectives, project life stage and social structure, and regional and organisational cost factors. Next, we present a taxonomy of potential social, economic, and technological impacts that can be both positive and negative, direct and indirect, internal (i.e. within a project) and external (i.e. among a project's ecosystem of dependents and users), and manifest over various time horizons. Furthermore, we discuss the merits and limitations of qualitative, quantitative, and mixed-methods approaches, as well as options for and hazards of estimating multiplier effects. With this toolkit, we contribute to the multi-stakeholder conversation about the value and impacts of funding on OSS developers and society at large.
... Identifying the negative effect of the capitalisation of knowledge helps to distinguish and resolve the contradictions between two different but related arguments. There is an extensive literature, based on the path-breaking contributions of Griliches (1979Griliches ( , 1981Griliches ( , 1986Griliches ( , 1992, who proposed the notion of stock of knowledge in the context of the technology production function, and Jaffe (1986), which shows that the greater the intensity of both R&D expenses and intangible capital, the larger is the increase in TFP (Abramovitz and David, 2000;Dettori et al., 2012;Marrocu et al., 2012;Bontempi and Mairesse, 2015;Niebel et al., 2017;Piekkola, 2018). More generally, the literature supports a strong and positive relationship between the extent to which firms invest resources in intangible assets and their propensity to innovate Vezzani, 2016, 2022). ...
... Missing values are filled in using a similar method to that of Coe et al. (2009), and then we calculate GERD stock values using the perpetual inventory method as in Coe and Helpman (1995), assuming the depreciation rate to be 0.05. The HK is also computed as a stock and is collected from the Penn World Table version 9.0 (Feenstra et al., 2015). 2 To account for knowledge spillovers, consistent with Griliches (1992) and with a relevant corpus of literature on international R&D spillovers, we consider foreign RD and foreign HK (WRD and WHK, respectively). We use geographic proximity (between capitals) as a channel of technology diffusion because of its consistency with theory (Keller 2002) and for exogeneity reasons, as it may be considered an exogenous proxy for some endogenous measures of socioeconomic, institutional, cultural, or linguistic similarities that might enhance the diffusion of technology. ...
This paper introduces a novel semiparametric econometric framework for policy evaluation and estimates a green knowledge production function for a large, 30-year panel dataset of high-income countries. Due to the substantial uncertainty in the data-generating process and the potential presence of nonlinearities and latent common factors, the paper explores semiparametric panel specifications that go beyond interactive fixed effects fully parametric models. The findings suggest that (i) the semiparametric additive specification with individual time trends is the preferred model, (ii) threshold effects and nonlinearities are salient features of the data that parametric specifications fail to capture, and (iii) the impact of environmental policy is noteworthy and exhibits clear heterogeneity when modelled as a nonparametric function of specific knowledge inputs. The evidence reveals a significant nonlinear policy inducement effect stemming from R&D investments.
... I n the era of open innovation (Chesbrough, 2003;Gassmann, 2006;Enkel et al., 2009;Gassmann et al., 2010), the shift toward increased reliance on R&D outsourcing is evident (Howells, 1999;Hagedoorn and Duysters, 2002;Hsuan and Mahnke, 2011;Mina et al., 2014;Shearmur and Doloreux, 2021). While the positive impact of the 'outside-in process' on R&D productivity and innovation performance is acknowledged (Griliches, 1991;Mohnen, 1996;Ili et al., 2010;Sofka and Grimpe, 2010;Mata and Woerter, 2013), existing research has predominantly focused on the demand side regarding the rationale, determinants, process, and effect of R&D outsourcing (Howells, 1999;Howells et al., 2008;Yamaguchi et al., 2021). The supply side, particularly R&D service firms (RDSFs), is understudied and often overshadowed by other providers such as universities and government-owned research institutes (Gassmann et al., 2010;Probert et al., 2013;Consoli and Elche, 2014;Li et al., 2020;Scaringella, 2022). ...
R&D service firms (RDSFs) are increasingly recognized as a hidden engine of the UK economy and crucial drivers within the UK’s innovation ecosystem, evolving from mere contractors and intermediaries to genuine innovators. Understanding the drivers of their innovation and growth is crucial for catalyzing economic advancement in the UK. Despite their acknowledged importance, research on RDSFs remains nascent, often relying on interviews and case studies without large‐scale empirical analysis. This study addresses this gap by comparing the innovation outcomes of private versus publicly‐traded RDSFs, reflecting their distinct financial and strategic environments, which influence their innovation trajectories. Using patent and scientific publication data from 2003 to 2019, we provide a robust analysis of the differences in innovation performance, efficiency, and strategic focus between these two categories of RDSFs. Our findings indicate that private RDSFs outperform in patent and publication outputs, exert greater influence on subsequent innovation, and demonstrate superior efficiency and exploration in their innovation process. This study offers critical insights for policymakers and industry leaders to formulate strategies that enhance the innovation impact of RDSFs within the broader UK innovation system.
... Among various discussions, knowledge spillover theory has been identified as a key factor to explain why GVCs support innovation. According to Griliches (1992), the market fails to price the R&D spillovers of innovation and ignores the related social value of start-ups. GVCs, in this regard, are designed to address this market failure (Lerner, 2000). ...
This paper examines the impact of governmental venture capital on green innovation utilizing a unique and comprehensive dataset in China between 2009 and 2018. Our results consistently reveal significant and positive effects of GVCs on green innovation, a result derived from the analysis of 317,870 firm-year observations conducted through a difference-in-differences and propensity score matching panel approach. Moreover, GVCs investments indicate a significant but smaller effect when they invest in start-ups. Following GVC investments, companies tend to attract additional private and other governmental financing. Interestingly, GVCs structured as limited partnerships appear to stimulate more green innovation compared to corporate-venture-structured GVCs.
... Unfortunately, not many studies have looked into the network good characteristic of IT and its effects on the firm's profits, productivity, IT spending, and other innovative efforts. Traditionally, spillovers have been studied widely in the context of R&D investments (Griffith et al., 2003;Griliches, 1992). Embodied knowledge spillovers accrue when the prices of intermediary goods, such as capital inputs and raw materials, do not adequately reflect the extent of knowledge embodied in them because of factors inhibiting perfect price discrimination. ...
This paper explores the effects of innovational investments in information technology (IT) on the productivity performance of firms. We employ a micro-level dataset of 3582 firms from Indian manufacturing spanning 1998 to 2016 to identify some critical channels through which IT investments may impact productivity. We find a significant impact of inter-industry network spillovers, suggesting that the convenience drawn from IT assets transmits to firms in other sectors of the economy without the recipient firms paying for it. These spillovers are higher for firms in the top 50 percentile of the industry in terms of their IT assets. Our results also show strong complementarities between IT, R&D, and disembodied technology purchased by the firm. We find that these technological inputs offer a synergistic effect on productivity. Our results also highlighted that these synergies vary by ownership and export status. IT also seems to mitigate the diminishing gains to R&D as firms scale their R&D effort. Overall, we show that IT investments not only provide crucial productivity returns but also synergize other technological investments to produce superior overall gains.
... La noción de spillovers de conocimiento remite a los aportes pioneros Nelson (1959) y Arrow (1962) sobre la naturaleza de bien público del conocimiento y se asocia, de este modo, al concepto de externalidad. En esta dirección, las externalidades de conocimiento se manifiestan en el beneficio obtenido por ciertas firmas a partir de la inversión en la creación de conocimiento llevada a cabo por otras empresas, sin compensar económicamente a estas últimas (Griliches, 1992;Jaffe, 1989;Agarwal et al.,2010). Siguiendo Agarwal et al. (2010), múltiples campos de estudio emplean el concepto de spillovers de conocimiento, tales como el aprendizaje organizacional, la transferencia de tecnología, las redes, la movilidad de los empleados y el espíritu empresarial, la aglomeración espacial, la evolución de la industria y el crecimiento económico endógeno. ...
El conocimiento proveniente de clientes, proveedores, competidores, universidades, es un insumo clave del proceso innovador de las firmas. En base al concepto de capacidad de absorción, el objetivo de este trabajo es analizar el impacto que los spillovers de conocimiento tienen sobre la obtención de innovaciones tecnológicas por parte de firmas industriales localizadas en Argentina e indagar en el rol moderador o mediador que ejerce la capacidad de absorción sobre tal impacto. Los spillovers de conocimiento constituyen uno de los canales o mecanismos de obtención de conocimiento externo. En este trabajo, los spillovers de conocimiento son captados a través del concepto de fuentes externas de información. Se diferencia entre fuentes externas de información de mercado, académicas y generales. Tras la aplicación de la técnica de descomposición de brechas Oaxaca-Blinder, no se encuentran resultados a favor de un efecto moderador de la capacidad de absorción de las firmas para ninguna de las fuentes externas de información consideradas. Se discuten las limitaciones, lineamientos futuros e implicancias de política.
This study examines how research and development (R&D) expenditures, temperature fluctuations, and rainfall variability influenced wheat productivity in China, India, and Pakistan from 1996 to 2018. Drawing on data from FAOSTAT, the Pakistan Economic Survey, and World Development Indicators, we employ Pooled Mean Group (PMG) and Autoregressive Distributed Lag (ARDL) models to explore short- and long-run dynamics. Our findings indicate that R&D investments do not exert a significant short-run effect but play a pivotal role in boosting wheat yields over the long run. Specifically, a 1% increase in R&D expenditure correlates with a 10% rise in wheat productivity across the three countries, although the returns vary—6% in China, 17% in India, and 12% in Pakistan—due in part to differences in innovation adoption and infrastructure. Additionally, a 1% temperature rise is associated with a 4% decrease in long-run yield, while variability in rainfall disrupts sowing schedules and reduces water availability during critical growth stages, further constraining productivity. These findings underscore that while climate factors pose significant risks to wheat yields, sustained investments in agricultural R&D and improved resource management are essential for enhancing food security in South Asia.
This paper extends the existing strand of research, delving into the link between innovation and economic growth for the small island developing state of Mauritius. The innovation-growth relationship is analyzed within a multivariate endogenous growth model, spanning the period 1970 to 2019 and to account for issues of dynamism, endogeneity and omitted variables bias, a vector error correction model is employed. Our results show that, in the long-run, the economic growth elasticity of research and development (R&D) expenditure is 0.02 and a bi-directional causality between R&D expenditure and economic growth is confirmed. Although this research could not confirm a short-run elasticity from R&D expenditure to economic growth, reverse causality from growth in GDP towards growth in R&D expenditure is validated. The policy implications of our findings are multi-fold. Firstly, R&D expenditure should be increased, but increasing expenditure per se should not be a sine quanone to improve the contribution of innovation to economic growth. R&D funders should ensure that proportionately more economic growth occurs with the protracted increased investment through enhanced innovation capability.
Optimising the allocation of limited research and development (R&D) resources significantly enhances the environmental benefits. Based on the innovation value chain theory, this study defines green R&D efficiency and investigates its impact on industrial carbon intensity from a spatial perspective. Using the spatial Durbin model, the results indicate that green R&D efficiency reduces industrial carbon intensity both locally and in neighbouring provinces. Endogenous bias and robustness check further confirm these findings. The key mechanisms driving this effect include green output efficiency and green industrial transformation. Additional analysis manifests that the reduction effect is more pronounced during the development stage of green R&D activities than during the research stage. However, both stages work synergistically to reduce industrial carbon intensity. Environmental regulation and a free market environment positively influence the environmental performance of green R&D efficiency. Finally, policy recommendations are provided.
The article is dedicated to assessing the impact of agglomeration effects on various sectors of the South Korean economy and manufacturing at modern times. To do this, based on the analysis of theoretical approaches and empirical studies of agglomeration effects in other countries, the most appropriate assessment method was selected that uses the Cobb-Douglas function. The concentration of economic activity is expected to have a significant impact on productivity in most sectors of the Korean economy. At the same time, more high-tech industries should benefit more from agglomeration of urbanization, while others benefit from concentration in specialized areas. It was determined that agglomeration effects have a significant impact on Korean economy and manufacturing, comparable to the results of previous empirical studies in Europe and North America. The negative impact of agglomeration is observed in agriculture, and various services are practically not at all affected by agglomeration. Contrary to expectations, agglomeration in Korea does not have such a strong impact on the finance and insurance, as in other countries. The positive impact of Marshall (MAR) agglomeration economies, that is, due to the concentration of enterprises in one industry, is maximum for wholesale and retail trade, real estate, information and communication technologies (ICT) and the mining industry. Real estate and ICT also benefit the most from agglomeration of urbanization (Jacobs effects) — the concentration of firms from different industries. For the Korean manufacturing industry, agglomeration of localization is more important, especially for the chemical industry and metallurgy, while agglomeration of urbanization is significant only for more high-tech industries (electronics, transport engineering). The results are significant for the development of regional and sectoral development strategies for countries already using the Korean experience or wishing to adopt certain successful mechanisms for optimizing regional industrial development policy.
From the perspective of a heterogeneous firm framework, we investigate the direct and spillover effects of public research and development (R&D) subsidies, firm heterogeneity, and external factors on innovation. Our analysis is based on panel data from manufacturing firms in Korea. We find three apparent roles of public R&D subsidy in enhancing firm-level innovation. First, public R&D subsidy has a direct positive impact on innovation in both the short and long run. Second, it does not have a stand-alone spillover effect on innovation. Third, public R&D subsidies have a positive spillover effect on innovation when combined with organizational slack in the short and long run and with leverage and firm size in the short run. Moreover, our analysis reveals that the impact of public subsidies, firm heterogeneity, external factors, and their interaction with innovation is primarily observed in firms with high absorptive capacity, not in those with low absorptive capacity. Based on these findings, the study recommends that when a government formulates its R&D policies, in order to enhance the efficiency and effectiveness of public R&D subsidies, it is necessary to prioritize understanding the various conditions and circumstances associated with the public R&D-productivity nexus. It is especially crucial to keep in mind that when firm heterogeneity—as a source of absorptive capacity and organizational learning—and the similarity of technology-based innovations are properly considered, public R&D subsidies can be efficient and effective policy tools for increasing direct benefits and inter-firm spillovers.
Financial resource misallocation and government innovation incentives may significantly trigger firms to engage in speculative innovation, prioritizing quantity over novelty. This prioritization hinders the enhancement of their core competencies. We investigate the impact of financial misallocation on enterprises’ speculative innovation using a panel data from Chinese listed enterprises spanning 2016 to 2019. By additionally introducing the firm’s intention to invest in innovation as a mediator and government interventions as moderators, we delve deeper into their interrelationships and mechanisms. Key findings of the study include: (1) Increased financial resource misallocation leads to a greater inclination for firms to engage in speculative innovation, with a one standard deviation increase in misallocation resulting in a 10.8% rise in the ratio of speculative patent filings. (2) Greater financial misallocation stifles firms’ intention to invest in innovation, while a stronger intention can suppress the inclination to innovate speculatively. This indicates a partial mediating role, accounting for over one-fifth of the total effect. (3) Government incentives, such as subsidies and tax preferences, while intended to promote innovation, negatively moderate (i.e., weakened) the dampening effect of firms’ intention to invest in R&D on speculative innovation, thereby inadvertently luring firms towards speculative innovation activities. This study provides valuable insights for formulating innovation incentive policies to foster industrial development. Moreover, it presents new perspectives on how financial market reforms can facilitate novel innovation by firms.
La obra, Ciencia, Tecnología y Sociedad en Costa Rica: reflexiones, trayectorias y desafíos entre el siglo XX y el siglo XXI, constituye una contribución significativa al estudio de la intersección entre el desarrollo científico y tecnológico y su impacto social en el contexto costarricense y latinoamericano. El libro está conformado por una serie de investigaciones inéditas que iluminan la complejidad de estos procesos desde una perspectiva crítica y transdisciplinaria.
New economic geography in a wide range of industrial theories explains why certain activities agglomerate in a certain region through the benefits of innovation activities. However, positive external economies of innovation have been less investigated in empirical studies. This study investigates the knowledge spillover effects of sectoral innovation on firm performance through the mediating effects of industrial parks in the manufacturing industry in Vietnam. Using the Vietnam Enterprises Survey (VES) data from 2011 to 2014 with 7,236 enterprises in combination with other data from the General Statistics Office (GSO), this study applied panel data regression with mixed-effects models and presented novel findings on knowledge spillover from sectoral innovation to firm performance in Vietnam. Sectoral innovation may require two years to have a positive effect on a firm’s value added, which supports lags in innovation on the productivity nexus, as suggested by Griliches. Interestingly, this positive spillover effect may be greater for enterprises located in industrial parks. This finding approves the approach of innovation economy that economic activities based on new knowledge are likely to be grouped into geographical regions. This may imply policies that enhance the effectiveness of innovation through the development of industrial parks.
Innovation is critical in the knowledge-based economy. It is generally accepted that governments have an important role to play in promoting innovative activity and R&D. Both the federal and provincial governments in Canada provide tax subsidies, and other forms of support, for R&D. Changes to various programs offered by the federal government were introduced in Budget 2012, most particularly related to the Scientific Research and Experimental Development (SR&ED) tax credit program. This paper analyzes the state of tax subsidies for R&D both pre- and post-budget, and at both the federal and provincial level. It is shown that there is a patchwork of effective tax subsidy rates in Canada, which vary both between and within provinces, between small versus large firms, and across sectors and types of R&D activity. The result is a misallocation of R&D resources and a system of government support that is less effective than it could be. On some dimensions Budget 2012 was a move in the right direction, but on other dimensions matters were made worse, resulting in a reconfiguration of tax support across R&D activities that is more distortionary and less efficient. Most particularly, the post-budget tax system heavily favours small firms over large firms, and labour intensive R&D over capital intensive R&D. This paper offers a lucid examination of R&D tax support pre- and post-budget, and argues persuasively that Canadian governments should adopt a more uniform, less distortionary approach to tax subsidies for R&D if they are truly interested in setting innovation free.
The research investigates the impact of foreign direct investment (FDI) on the innovation activities of small and medium enterprises (SMEs) in Vietnam. The data in this research are extracted from the survey of SMEs in 2011, 2013, and 2015. Using the Bayesian Logit regression method via simulation of the Markov Chain Monte Carlo—MCMC), the research demonstrates that FDI flows tend to overwhelm the innovation activities of SMEs. This result implies that SMEs should focus on investment, technology, and the quality of FDI flows. In addition, the study confirms the internal factors of the enterprise, including the education level of the manager, the number of years of operation of the enterprise, the enterprise located in the industrial park or export processing zone, enterprises with export activities, enterprises with official websites and provincial-specific factor measured through the provincial competitiveness index positively affect the innovation activities of SMEs.
Anti-scientific attitudes can impose substantial costs on societies. Can schools be an important agent in mitigating the propagation of such attitudes? This paper investigates the effect of the content of science education on anti-scientific attitudes, knowledge, and choices. The analysis exploits staggered reforms that reduce or expand the coverage of evolution theory in US state science education standards. I compare adjacent student cohorts in models with state and cohort fixed effects. There are three main results. First, expanded evolution coverage increases students’ knowledge about evolution. Second, the reforms translate into greater evolution belief in adulthood, but do not crowd out religiosity or affect political attitudes. Third, the reforms affect high-stakes life decisions, namely the probability of working in life sciences.
O presente trabalho investigou a convergência da frota de automóveis per capita nas microrregiões brasileiras por meio dos processos de convergência absoluta, condicional e testou a hipótese da existência de clubes de convergência, no período 2004 a 2015. Ademais, considerou-se também a defasagem espacial e de transbordamentos das variáveis explicativas. Tais análises buscaram averiguar a existência de coeficientes 𝛽 e de velocidades de convergência específicos para cada modelo apresentado. Para atingir os objetivos foi necessário averiguar a dinâmica espaço-temporal da demanda efetiva de automóveis per capita, afim de localizar os padrões de associação espacial, para assim realizar a da busca por clusters espaciais significativos entre as microrregiões brasileiras, deste modo, foram utilizadas as ferramentas de Análise Exploratória de Dados Espaciais (AEDE), Análise de Cluster e da Econometria Espacial. O Estudo confirmou a hipótese de homogeneização da demanda de automóveis per capita além considerar a existência de clubes de convergência.
Background
Decisions follow patterns that are introduced by human perception. Research and development (R&D) are influenced by these patterns. Furthermore, R&D publications can represent repetitive attempts to solve similar, or the same problems. Literature reviews serve as an important tool for identifying these trends, but they are time consuming. The time commitment of a literature review can be reduced by using a sample of research. This will allow an infinite population of research to be generalized. Additionally, spatiotemporal analysis is most appropriate for fields that follow time and geographic trends, such as public health. Also, using research locations to perform this analysis potentially captures the social return of R&D, as knowledge gained. As a result, an inferential spatiotemporal methodological framework is introduced to quickly identify research trends using public health research. This was applied to a childhood Pb exposure case study.
Methods
A body of more than 1000 childhood elevated blood lead (Pb) level (EBLL) research articles were used to extract publication years, research locations, and subtopics. These publications were grouped into research locations (i.e., U.S. states where research was conducted; not publication location) and averaged over years published (i.e., 29 years). Binary indicator variables were derived using the subtopics extracted and the periods identified in time trend analyses. Explanatory variables were used to conduct hypothesis testing. Significant variables were used to generalize the population of the annual average EBLL articles written per state.
Results
The range of the annual average of EBLL research articles by state was 0–1.7 articles, with a mean of 0.3 articles. Thirty-eight explanatory variables suggested a significant effect on research article production. These included temporal, sociodemographic, education, structure age, environmental, and economic variables. The strongest effect on research production for U.S. states came from the number of structures built before 1950. A predictive model was selected to generalize the population of articles using time-periods 1990-95, environmental subtopic, and structures built before 1950. The locations with the most research production for this topic were California and New York. The locations with the least research production for this topic were Alaska, Hawaii, Nevada, Wyoming, North Dakota, South Dakota, Mississippi, Delaware, and New Hampshire.
Conclusion
If the trend for R&D is to make fast decisions, more human bias will be introduced into the decision-making process. Analytical tools that enable researchers to identify trends and ask more questions about their field will mitigate these biases. This hypothesis testing and predictive modeling methodology provide researchers and other decision makers with analytical tools they can use to quickly identify research trends and narrow their field of research. Additionally, this analysis potentially captures the impact of discovered ideas, as a social return spillover, for this topic.
This paper explores the determinants of knowledge flows, proxied by patent citations, within 31 Chinese administrative provinces. Relying on patent data from the US Patent and Trademark Office during the period 1995-2019, we are able to identify 27118 patent citation pairs (focusing only on USPTO patents with first inventors residing in China). In order to explain the number of citations from a Province to another, in addition to geographic and technological proximity, we use factor analysis in order to capture the effect of regional research structure. In particular, we measure the private versus public research intensity of each Chinese administrative province. Our econometric results show that, as expected, geographical and technological distance between Provinces are negatively correlated with patent citations. In addition, we find that Chinese administrative provinces that show bigger intensity with regard to public and to private research both receive more patent citations and cite more other patents in other Provinces. This effect is particularly significant when the two regions are specialized in private research, which indicates a strong effect of cognitive proximity. Finally, and at odds with prior research, we find that controlling for social proximity between Provinces does not impact the effect of geographical and technological proximity. These results, if confirmed by further studies, might have significant policy implications.
Recent research on innovation management and knowledge transfer has demonstrated that industry knowledge collaboration and knowledge spillovers matter for innovation, but so does a firm's Research and Development (R&D). Conditional to a firm's R&D investment, this study makes a theoretical investigation into the role of two knowledge transfer strategies—industry coopetition and industry knowledge spillovers for a firm's innovation. Based on an analysis of a sample of 17,859 UK firms from 2002 to 2014, we demonstrated why and under what conditions firms will (a) invest in internal R&D, (b) engage in coopetition, and (c) access knowledge spillovers to introduce new to firm (incremental innovation) and new to market products (radical innovation). The results of this study demonstrate that firm managers who choose knowledge spillovers versus coopetition are likely to achieve radical vis-à-vis incremental innovation. Benefits from the coopetition can be achieved with low investment in R&D, while R&D is essential in recognizing the knowledge spillover for radical innovation. By deciding whether to deploy its costly R&D and access external knowledge via industry coopetition or spillovers, the firm is also making a concomitant decision about the type of innovative activity it will generate. Thus, a firm strategy for knowledge transfer and investing in knowledge internally is inextricably linked to a firm strategy involving the type of innovative output.
Government-sponsored venture capital (GVC) has been used to support financially constrained start-ups as an important policy tool in China. Typically, to motivate the social capital to invest in start-ups, GVC provides subsidies for them to bridge the funding gap in the early-stage venture capital market. However, the effect and mechanism of GVC affecting social capital investment have not been clearly studied. In this paper, the authors not only develop a game model to analyze this issue in theory, but conduct an empirical study by analyzing the 14741 records matched by propensity score matching (PSM) of Chinese venture capital market data from 2011 to 2021. The proposed findings are as the follows. Firstly, the subsidies offered by GVC will simultaneously increase the returns and risks of investments in start-ups of social capital with more volatile incentive effect of GVC. The incentive effect of GVC is only effective when the returns resulting from the subsidies outweigh the risks they introduce. In the context of the Chinese venture capital market, the incentive effect of GVC is effective. Secondly, the incentive effect of GVC is more pronounced in high-tech industries, which can be attributed to the signaling effect facilitated by GVC. In this context, the subsidy mainly helps social capital to bear the costs associated with screening potential investments. Thirdly, the incentive effect of GVC is more significant in underdeveloped venture capital markets, which can be explained by the “virtuous cycle” effect, in which GVC plays a pioneering role in establishing a more robust early-stage market trading system. By examining these three points, this study contributes to a better understanding of how GVC can effectively guide social capital investment, especially in the Chinese landscape.
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