The Importance (Impacts) of Knowledge at the Macro–Micro Levels

This Chapter uses the firm survey ((2002). Technological change and skill development: A comparative study of chemical and metal medium and large scale enterprises in the UAE. UAE, April, 2002.) data at the micro level and secondary data at the macro level to examine hypothesis 7 concerning the importance/impacts of tacit and codified sources of knowledge at the micro and macro levels respectively in the Gulf countries. Our results prove this hypothesis and show that at the macro level tacit knowledge is positively correlated with schooling years, while codified knowledge is positively correlated with GDP (economic growth). Moreover, we find that at the macro level codified knowledge and the number of FTER show positive correlations with the number of publications, cooperation and technology (patents). Furthermore, at the aggregate level, our results imply a significant positive complementary relationship between the number of FTER and codified knowledge, which we interpret as a complementary relationship between tacit knowledge and codified knowledge. At the micro (firm) level, we illustrate the importance of tacit knowledge, which shows positive significant correlations with technology (expenditures on ICT) and upskilling (expenditures on training), output, output diversification, productivity and profit. Finally, we find that at the micro (firm) level, tacit knowledge shows positive significant correlations with total investment, capital, and firm size. This can be interpreted that higher levels of total investment, capital and firm size would correspond to more tacit knowledge across firms. Our results at the micro and macro levels verify the four stylized facts presented in this Chapter, which are consistent with the general findings in the knowledge literature.