Understanding multilevel interactions in economic development
Abstract
National framework conditions mediate the effect of technological capabilities of firms on their productivity. Although this has been recognized in the literature for a long time, a quantitative test that explicitly considers this hypothesis has been lacking. Using a World Bank datasets of about 19,000 firms in 42 countries, most of which are developing, we estimate a multilevel production function with effects of firm's technological capabilities nested in the national framework conditions. Our results confirm that various facets of firm's technological capabilities and national economic, technological and institutional conditions influence total factor productivity of firms. Furthermore, we find that the effects of the national conditions and firm's technological capabilities are closely intertwined with each other. Adherence to international standards, formal training of workers and access to technology through foreign ownership make more difference for productivity of firms in less developed countries, while R&D capabilities on the contrary boost significantly more performance of firms in countries at the technological frontier. Different features of the national framework are shown to be responsible for this.Download Info
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Paper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number 003.Length:
Date of creation: 2010
Date of revision:
Handle: RePEc:dgr:unumer:2010003
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Web page: http://www.merit.unu.edu
Related research
Keywords: Productivity; innovation; technological capability; institutions; multilevel modeling;Other versions of this item:
- Micheline Goedhuys & Martin Srholec, 2010. "Understanding multilevel interactions in economic development," Working Papers on Innovation Studies 20100208, Centre for Technology, Innovation and Culture, University of Oslo.
- C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-30 (All new papers)
- NEP-INO-2010-01-30 (Innovation)
References
References listed on IDEASPlease 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.:
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Kemeny, Thomas, 2010. "Does Foreign Direct Investment Drive Technological Upgrading?," World Development, Elsevier, vol. 38(11), pages 1543-1554, November.
- Martin Srholec, 2011. "Understanding the heterogeneity of cooperation on innovation: Firm-level evidence from Europe," Working Papers on Innovation Studies 20111201, Centre for Technology, Innovation and Culture, University of Oslo.
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