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Latent innovation in local economies

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  • Goetz, Stephan J.
  • Han, Yicheol

Abstract

We propose a measure of latent innovation in local economies based on spillovers among industries in terms of inter-industry sales and purchases as well as spatial proximity. The proposed measure captures innovation that is not reflected in typical NSF-based statistics such as patents, R&D spending, or science and engineering workers. When the results are mapped for the U.S., regions that one would expect to be highly innovative also show up as such. To determine whether this measure helps to explain economic growth beyond traditional factors such as human capital and agglomeration, and conventional measures of innovation, we estimate simple regression models with income and employment growth as dependent variables. The proposed innovation measure is statistically significant even after we control for rival causes of growth. We suggest that our measure is preferable to conventional innovation indicators for understanding where in the U.S. innovation, more broadly defined, is occurring.

Suggested Citation

  • Goetz, Stephan J. & Han, Yicheol, 2020. "Latent innovation in local economies," Research Policy, Elsevier, vol. 49(2).
    • Handle: RePEc:eee:respol:v:49:y:2020:i:2:s0048733319302276
    DOI: 10.1016/j.respol.2019.103909
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    Cited by:

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    3. Carmen Păunescu & Elisabeta Molnar, 2020. "Country’s Entrepreneurial Environment Predictors for Starting a New Venture—Evidence for Romania," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    4. Noor Fauziah Isnaeni & Khoirunurrofik Khoirunurrofik, 2021. "The effect of knowledge spillovers and human capital through technological intensity on employment growth in Indonesia," Asia-Pacific Journal of Regional Science, Springer, vol. 5(1), pages 21-39, February.

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    More about this item

    Keywords

    Latent innovation; Local economic growth; Input-output table;
    All these keywords.

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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