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Innovation, Demand and Knowledge Spillovers: Theory and Evidence From European Regions

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  • Bottazzi, Laura

Abstract

The Importance of innovation for the economic performance of industrialized countries has been largely stressed recently by the theoretical and empirical literature. Very few studies have carefully considered the determinants of European innovation, the productivity of its R&D and the existence of knowledge spillovers across regional boundaries. Here we develop a model which, emphasizing "the demand pull" as a key exogenous determinant of long-run innovation across regions, allows us to estimate the returns to regional R&D as a generator of innovation. We find that most of the cross-regional differences in innovation rates can be explained by own R&D, even after correcting for the endogeneity bias. Moreover, significant spillovers are found among geographically close regions, especially if they are technologically similar.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2279.

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Date of creation: Oct 1999
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Handle: RePEc:cpr:ceprdp:2279

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Keywords: Endogenous Innovation; Regional R&D; Spatial Spillovers;

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Cited by:
  1. Fabrice Darrigues, 2003. "Externalités de connaissance, équilibres spatiaux et bien-être," Économie et Prévision, Programme National Persée, vol. 157(1), pages 121-143.
  2. Alejandro Diaz-Bautista, 2005. "Convergence and Economic Growth considering Human Capital and R&D Spillovers Convergencia y Crecimiento Economico en Mexico considerando al Capital Humano y derrames en Investigacion y Desarrollo," Urban/Regional 0506012, EconWPA.
  3. Funke, Michael & Niebuhr, Annekatrin, 2000. "Spatial R&D spillovers and economic growth : evidence from West Germany," HWWA Discussion Papers 98, Hamburg Institute of International Economics (HWWA).
  4. Maria Mancusi, 2001. "Technological specialization in industrial countries: Patterns and dynamics," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(4), pages 593-621, December.
  5. Huovari, Janne & Alanen, Aku & Kangasharju, Aki, 2000. "Regional Competitiveness In Finland," ERSA conference papers ersa00p234, European Regional Science Association.
  6. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
  7. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric & TEIXEIRA, Antonio Carlos, 2003. "Agglomeration economies and the location of industries: a comparison of three small European countries," CORE Discussion Papers 2003067, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Gabriele Tondl, 2002. "Trade, Human Capital and Innovation: The Engines of European Regional Growth in the 1990s," Computing in Economics and Finance 2002 237, Society for Computational Economics.
  9. Frankel, Jeffrey, 2004. "Real Convergence and Euro Adoption in Central and Eastern Europe: Trade and Business Cycle Correlations as Endogenous Criteria for Joining EMU," Working Paper Series rwp04-039, Harvard University, John F. Kennedy School of Government.
  10. Laura Bottazzi & Giovanni Peri, 2000. "Innovation and Spillovers: Evidence from European Regions," CESifo Working Paper Series 340, CESifo Group Munich.
  11. Wolfgang Keller, 2001. "International Technology Diffusion," NBER Working Papers 8573, National Bureau of Economic Research, Inc.
  12. Gong, Guan & Keller, Wolfgang, 2003. "Convergence and polarization in global income levels: a review of recent results on the role of international technology diffusion," Research Policy, Elsevier, vol. 32(6), pages 1055-1079, June.
  13. Maria Luisa Mancusi, 2000. "The Dynamics of Technology in Industrial Countries," KITeS Working Papers 118, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2000.
  14. Dion, David-Pascal, 2004. "Regional integration and economic development: An empirical approach," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 21, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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