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Domestic Industrial Learning Externalities of Innovation and Imitation: Informing Industrial Policy with Cross-country Evidence

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  • K Y Lim
  • A Raza

Abstract

This study estimates four different domestic industrial learning externalities of and between imitation and innovation. Using highly disaggregated industrial data as measures for product varieties, we test for the relationship between imitation and innovation based on four theoretically informed, policy-relevant hypotheses. In sum, we document robust and statistically significant stepping-stone effect of imitation on innovation, and a reverse positive creative-imitation effect from innovation to imitation. Likewise, we also estimate positive within-sector learning effects for both innovation and imitation. These empirical findings have significant implications for industrial policies designed to foster innovation-driven growth, especially in middle-income and developing economies.

Suggested Citation

  • K Y Lim & A Raza, 2020. "Domestic Industrial Learning Externalities of Innovation and Imitation: Informing Industrial Policy with Cross-country Evidence," Economic Issues Journal Articles, Economic Issues, vol. 25(1), pages 61-85, March.
    • Handle: RePEc:eis:articl:120lim
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    Keywords

    Industrialisation; Industrial Policies; Imitation; Innovation;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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