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Innovation flow through social networks: productivity distribution in France and Italy

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  • T. Di Matteo

    ()

  • T. Aste
  • M. Gallegati

Abstract

From a detailed empirical analysis of the productivity of non financial firms across several countries and years we show that productivity follows a non-Gaussian distribution with `fat tails' in the large productivity region which are well mimicked by power law behaviors. We discuss how these empirical findings can be linked to a mechanism of exchanges in a social network where firms improve their productivity by direct innovation and/or by imitation of other firm's technological and organizational solutions. The type of network-connectivity determines how fast and how efficiently information can diffuse and how quickly innovation will permeate or behaviors will be imitated. From a model for innovation flow through a complex network we show that the expectation values of the productivity of each firm are proportional to its connectivity in the network of links between firms. The comparison with the empirical distributions in France and Italy reveals that in this model, such a network must be of a scale-free type with a power-law degree distribution in the large connectivity range. Copyright EDP Sciences/Società Italiana di Fisica/Springer-Verlag 2005

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File URL: http://hdl.handle.net/10.1140/epjb/e2005-00332-y
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Bibliographic Info

Article provided by Springer in its journal The European Physical Journal B - Condensed Matter and Complex Systems.

Volume (Year): 47 (2005)
Issue (Month): 3 (October)
Pages: 459-466

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Handle: RePEc:spr:eurphb:v:47:y:2005:i:3:p:459-466

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Web page: http://www.springer.com/economics/journal/10051

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  1. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
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Cited by:
  1. C. Guilmi & F. Clementi & T. Matteo & M. Gallegati, 2008. "Social networks and labour productivity in Europe: an empirical investigation," Journal of Economic Interaction and Coordination, Springer, vol. 3(1), pages 43-57, June.
  2. König, Michael & Lorenz, Jan & Zilibotti, Fabrizio, 2012. "Innovation vs imitation and the evolution of productivity distributions," CEPR Discussion Papers 8843, C.E.P.R. Discussion Papers.

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