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Factors Affecting Regional Productivity and Innovation in Israel: Some Empirical Evidence

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  • Daniel Felsenstein

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F elsenstein D. Factors affecting regional productivity and innovation in Israel: some empirical evidence, Regional Studies . The role of human capital and physical capital in determining regional productivity and innovation is examined. Two specific mechanisms through which knowledge becomes an inherently regional asset are investigated: the generation of local externalities (a stock mechanism) and human capital accumulation and mobility (a flow mechanism). Empirically, this connection is investigated using recent advances in spatial panel data analysis applied to regions in Israel. Panel co-integration is used to entangle issues of spurious relationships. Results show that human capital stock has large and relatively consistent effects on both regional earnings and regional innovation levels. Human capital mobility is inversely related to innovation. This is interpreted as reflecting the 'conduit' role of the region in the innovation process. Regional capital-to-labour ratios are also inversely related to innovation, implying that physical capital substitutes rather than complements human capital.

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  • Daniel Felsenstein, 2015. "Factors Affecting Regional Productivity and Innovation in Israel: Some Empirical Evidence," Regional Studies, Taylor & Francis Journals, vol. 49(9), pages 1457-1468, September.
    • Handle: RePEc:taf:regstd:v:49:y:2015:i:9:p:1457-1468
    DOI: 10.1080/00343404.2013.837871
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    2. Shi‐Xiao Wang & Wen‐Min Lu & Shiu‐Wan Hung, 2020. "Improving innovation efficiency of emerging economies: The role of manufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 503-519, June.
    3. Alonso-Martínez, Daniel, 2018. "Social progress and international patent collaboration," Technological Forecasting and Social Change, Elsevier, vol. 134(C), pages 169-177.
    4. Guoyuan Han & Zhilin Zhang, 2022. "Regional innovation paths selection in complex environments of China: A configurational perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2598-2606, September.

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