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Spillovers, Linkages and Technical Change

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  • Edward Wolff

Abstract

Using US input-output data for the period 1958-87, I find strong evidence that industry total factor productivity (TFP) growth is significantly related to the TFP performance of the supplying sectors, with an elasticity of almost 60%. R&D intensity is also found to be a significant determinant of industry TFP growth, with an estimated return of about 10-13% and the return to embodied R&D is estimated at 43%. Direct productivity spillovers, from the technological progress made by supplying sectors, appear to be more important than spillovers from the R&D performed by suppliers. They also play a key role in explaining changes in manufacturing TFP growth over time. Changes in the contribution made by direct productivity spillovers to TFP growth account for almost half of the slowdown in TFP growth in manufacturing from 1958-67 to 1967-77, and for 20% of the TFP growth recovery in this sector from 1967-77 to 1977-87. Changes in R&D intensity and embodied R&D are relatively unimportant in explaining movements in manufacturing TFP growth over these three periods.

Suggested Citation

  • Edward Wolff, 1997. "Spillovers, Linkages and Technical Change," Economic Systems Research, Taylor & Francis Journals, vol. 9(1), pages 9-23.
    • Handle: RePEc:taf:ecsysr:v:9:y:1997:i:1:p:9-23
    DOI: 10.1080/09535319700000002
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    1. Murray Brown, 1967. "Introduction to "The Theory and Empirical Analysis of Production"," NBER Chapters, in: The Theory and Empirical Analysis of Production, pages 3-13, National Bureau of Economic Research, Inc.
    2. Murray Brown, 1967. "The Theory and Empirical Analysis of Production," NBER Books, National Bureau of Economic Research, Inc, number brow67-1, March.
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    Cited by:

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    2. Edward N. Wolff, 2011. "Spillovers, Linkages, and Productivity Growth in the US Economy, 1958 to 2007," NBER Working Papers 16864, National Bureau of Economic Research, Inc.
    3. Jan Bonenkamp & Martijn van de Ven, 2006. "A small stochastic model of a pension fund with endogenous saving," CPB Memorandum 168.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Eduardo Gonçalves & Fernando Salgueiro Perobelli & Inácio Fernandes Araújo, 2017. "Estimating intersectoral technology spillovers for Brazil," The Journal of Technology Transfer, Springer, vol. 42(6), pages 1377-1406, December.
    5. Bas Straathof & Gert Jan Linders & Arjan Lejour & Jan Möhlmann, 2008. "The internal market and the Dutch economy: implications for trade and economic growth," CPB Document 168.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Magnani, Elisabetta, 2009. "How does technological innovation and diffusion affect inter-industry workers' mobility?," Structural Change and Economic Dynamics, Elsevier, vol. 20(1), pages 16-37, March.
    7. Ana Muñiz & Antonio Raya & Carmen Carvajal, 2010. "Spanish and European innovation diffusion: a structural hole approach in the input–output field," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(1), pages 147-165, February.
    8. Nahuis, R. & Tang, P.J.G., 1999. "Sectoral Productivity Growth and R&D Spillovers in the Netherlands," Discussion Paper 1999-15, Tilburg University, Center for Economic Research.
    9. Ejermo, Olof, 2004. "Productivity Spillovers of R&D in Sweden," Working Paper Series in Economics and Institutions of Innovation 15, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    10. ten Raa, Thijs & Wolff, Edward N., 2000. "Engines of growth in the US economy," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 473-489, December.
    11. Chunyun Wang & Senyu Xing & Lixiao Xu, 2023. "A Multi-Regional Input–Output Model to Measure the Spatial Spillover of R&D Capital," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
    12. Juhyun Oh & Dong Hee Suh, 2019. "The Industrial Linkages and Supply Effects of the U.S. R&D Sector: Comparison with OECD Countries," Social Sciences, MDPI, vol. 8(3), pages 1-10, March.
    13. Pierre Koning & Karen Wiel, 2012. "School Responsiveness to Quality Rankings: An Empirical Analysis of Secondary Education in the Netherlands," De Economist, Springer, vol. 160(4), pages 339-355, December.
    14. Elisabetta Magnani, 2006. "Technological diffusion, the diffusion of skill and the growth of outsourcing in US manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(7), pages 617-647.
    15. Boikos, Spyridon & Bucci, Alberto & Stengos, Thanasis, 2022. "Leisure and innovation in horizontal R&D-based growth," Economic Modelling, Elsevier, vol. 107(C).
    16. RM. Serrano & R. Paci & S. Usai, 2003. "Spatial distribution of innovation activity. The case of European regions," Working Paper CRENoS 200310, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    17. G. Serrano-Domingo & B. Cabrer-Borrás, 2017. "Direct and indirect knowledge spillovers and industrial productivity," Industry and Innovation, Taylor & Francis Journals, vol. 24(2), pages 165-189, February.
    18. Roger Smeets & Albert de Vaal, 2011. "Knowledge diffusion from FDI and Intellectual Property Rights," CPB Discussion Paper 168.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    19. Ana Salomé García & Antonio Morillas & Carmen Rueda, 2005. "Relaciones interindustriales y difusión de la innovación: una aproximación desde la Teoría de Redes," Urban/Regional 0512005, University Library of Munich, Germany.
    20. Martin Mellens & Herman Noordman & Johan Verbruggen, 2007. "Re-exports: international comparison and implications for performance indicators," CPB Document 149.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    Keywords

    Embodied R&D; embodied total factor productivity growth; productivity; linkages; USA;
    All these keywords.

    JEL classification:

    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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