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The Dynamics of Knowledge Diversity and Economic Growth

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  • Marcus BERLIANT
  • FUJITA Masahisa

Abstract

How is long run economic growth related to the endogenous diversity of knowledge? We formulate and study a microeconomic model of knowledge creation, through the interactions among a group of heterogeneous R & D workers, embedded in a growth model to address this question. In contrast with the traditional literature, in our model the composition of the research work force in terms of knowledge heterogeneity matters, in addition to its size, in determining the production of new knowledge. Moreover, the heterogeneity of the work force is endogenous. Income to these workers accrues as patent income, whereas transmission of newly created knowledge to all such workers occurs due to public transmission of patent information. Knowledge in common is required for communication, but differential knowledge is useful to bring originality to the endeavor. Whether or not the system reaches the most productive state depends on the strength of the public knowledge transmission technology. Equilibrium paths are found analytically. Long run economic growth is positively related to both the effectiveness of pairwise R & D worker interaction and to the effectiveness of public knowledge transmission.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 10024.

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Length: 73 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:eti:dpaper:10024

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Cited by:
  1. Florian Noseleit & Rene Söllner, 2011. "Diversity of human capital and regional growth," ERSA conference papers ersa10p245, European Regional Science Association.
  2. Berliant, Marcus & Yu, Chia-Ming, 2009. "Locational signaling and agglomeration," MPRA Paper 19462, University Library of Munich, Germany.
  3. Neil Lee & Max Nathan, 2011. "Does cultural diversity help innovation in cities: evidence from London firms," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 33579, London School of Economics and Political Science, LSE Library.
  4. Tavassoli, Sam & Carbonara , Nunzia, 2013. "The Role of Knowledge Variety and Intensity for Regional Innovative Capability," CIRCLE Electronic Working Papers, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy 2013/34, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  5. Sam Tavassoli & Nunzia Carbonara, 2013. "The Role of Knowledge Variety and Intensity for Regional Innovative Capability - Swedish evidence," Papers in Evolutionary Economic Geography (PEEG) 1317, Utrecht University, Section of Economic Geography, revised Oct 2013.
  6. Max Nathan, 2011. "Ethnic Inventors, Diversity and Innovation in the UK: Evidence from Patents Microdata," SERC Discussion Papers 0092, Spatial Economics Research Centre, LSE.
  7. Max Nathan, 2013. "Top Team Demographics, Innovation And Business Performance: Findings From English Firms And Cities, 2008-9," ERSA conference papers ersa13p69, European Regional Science Association.
  8. Berliant, Marcus & Fujita, Masahisa, 2011. "Culture and diversity in knowledge creation," MPRA Paper 33640, University Library of Munich, Germany.
  9. Ryusuke Ihara, 2011. "Agglomeration with the pros and cons of labor heterogeneity," ERSA conference papers ersa11p528, European Regional Science Association.
  10. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2012. "The Nexus between Labor Diversity and Firm's Innovation," IZA Discussion Papers 6972, Institute for the Study of Labor (IZA).

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