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Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth

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Narula,Rajneesh (MERIT)

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Abstract

This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro–level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation.

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Paper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 004.

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Date of creation: 2004
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Handle: RePEc:dgr:umamer:2004004

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Keywords: economics of technology

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Etzkowitz, Henry & Leydesdorff, Loet, 2000. "The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix of university-industry-government relations," Research Policy, Elsevier, vol. 29(2), pages 109-123, February. [Downloadable!] (restricted)
  2. Glass, Amy Jocelyn & Saggi, Kamal, 1998. "International technology transfer and the technology gap," Journal of Development Economics, Elsevier, vol. 55(2), pages 369-398, April. [Downloadable!] (restricted)
  3. Ramos, Joseph, 2000. "Policy Directions for the New Economic Model in Latin America," World Development, Elsevier, vol. 28(9), pages 1703-1717, September. [Downloadable!] (restricted)
  4. Ethan B. Kapstein, 2002. "Virtuous Circles? Human Capital Formation, Economic Development and the Multinational Enterprise," OECD Development Centre Working Papers 191, OECD Development Centre. [Downloadable!]
  5. Marco Vivarelli, 2007. "Innovation and Employment: A Survey," IZA Discussion Papers 2621, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September. [Downloadable!] (restricted)
  7. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August. [Downloadable!] (restricted)
  8. Narula,Rajneesh & Criscuolo,Paola, 2002. "A novel approach to national technological accumulation and absorptive capacity: Aggregating Cohen and Levinthal," Research Memoranda 018, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
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  9. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  10. Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February. [Downloadable!] (restricted)
  11. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February. [Downloadable!] (restricted)
  12. Matthew J. Slaughter, 2002. "Skill Upgrading in Developing Countries: Has Inward Foreign Direct Investment Played a Role?," OECD Development Centre Working Papers 192, OECD Development Centre. [Downloadable!]
  13. Katrak, Homi, 2002. "Does economic liberalisation endanger indigenous technological developments?: An analysis of the Indian experience," Research Policy, Elsevier, vol. 31(1), pages 19-30, January. [Downloadable!] (restricted)
  14. Anthony Arundel & Aldo Geuna, 2001. "Does Proximity Matter for Knowledge Transfer from Public Institutes and Universities to Firms?," SPRU Electronic Working Paper Series 73, University of Sussex, SPRU - Science and Technology Policy Research. [Downloadable!]
  15. Oyelaran-Oyeyinka, Banji & Barclay, Lou Anne, 2003. "Systems of Innovation and Human Capital in African Development," Discussion Papers 2, United Nations University, Institute for New Technologies. [Downloadable!]
  16. Hagedoorn ,John & Narula ,Rajneesh, 1995. "Evolutionary understanding of corporate foreign investment behaviour : US foreign direct investment in Europe," Research Memoranda 001, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  17. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-75, September. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lall, Sanjaya & Narula,Rajneesh, 2004. "FDI and its role in economic development: Do we need a new agenda?," Research Memoranda 019, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  2. Narula ,Rajneesh, 2005. "Globalisation, EU expansion and consequences for MNE location," Research Memoranda 003, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  3. Tobias Schmidt, 2005. "Absorptive Capacity – One Size Fits All? A Firm-level Analysis of Absorptive Capacity for Different Kinds of Knowledge," Industrial Organization 0510010, EconWPA. [Downloadable!]
    Other versions:
  4. Narula ,Rajneesh & Marin ,Anabel, 2005. "Exploring the relationship between direct and indirect spillovers from FDI in Argentina," Research Memoranda 024, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  5. Mario Cimoli & Marcio Holland & Gabriel Porcile & Annalisa Primi & Sebastiàn Vergara, 2006. "Growth, Structural Change and Technological Capabilities. Latin America in a Comparative Perspective," LEM Papers Series 2006/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
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