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The Dynamics of Knowledge Diversity and Economic Growth

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  • Berliant, Marcus
  • 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 University Library of Munich, Germany in its series MPRA Paper with number 21009.

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Date of creation: 27 Feb 2010
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Handle: RePEc:pra:mprapa:21009

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Keywords: knowledge creation; knowledge externalities; microfoundations of endogenous growth; knowledge diversity and growth;

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  1. Berliant, Marcus & Reed III, Robert R. & Wang, Ping, 2006. "Knowledge exchange, matching, and agglomeration," Journal of Urban Economics, Elsevier, vol. 60(1), pages 69-95, July.
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  10. Marcus Berliant & Masahisa Fujita, 2005. "Knowledge Creation as a Square Dance on the Hilbert Cube," Game Theory and Information 0506006, EconWPA, revised 26 Sep 2005.
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  13. Manuel Trajtenberg & Gil Shiff & Ran Melamed, 2006. "The "Names Game": Harnessing Inventors' Patent Data for Economic Research," NBER Working Papers 12479, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Berliant, Marcus & Yu, Chia-Ming, 2012. "Locational signaling and agglomeration," MPRA Paper 41838, University Library of Munich, Germany.
  2. Marcus BERLIANT & FUJITA Masahisa, 2011. "Culture and Diversity in Knowledge Creation," Discussion papers 11046, Research Institute of Economy, Trade and Industry (RIETI).
  3. Neil Lee & Max Nathan, 2011. "Does Cultural Diversity Help Innovation in Cities: Evidence from London Firms," SERC Discussion Papers 0069, Spatial Economics Research Centre, LSE.
  4. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2011. "The Nexus between Labor Diversity and Firm's Innovation," Norface Discussion Paper Series 2011005, Norface Research Programme on Migration, Department of Economics, University College London.
  5. 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.
  6. 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.
  7. Florian Noseleit & Rene Söllner, 2011. "Diversity of human capital and regional growth," ERSA conference papers ersa10p245, European Regional Science Association.
  8. Max Nathan, 2011. "Ethnic Inventors, Diversity and Innovation in the UK: Evidence from Patents Microdata," SERC Discussion Papers 0092, Spatial Economics Research Centre, LSE.
  9. Tavassoli, Sam & Carbonara , Nunzia, 2013. "The Role of Knowledge Variety and Intensity for Regional Innovative Capability," CIRCLE Electronic Working Papers 2013/34, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  10. Ryusuke Ihara, 2011. "Agglomeration with the pros and cons of labor heterogeneity," ERSA conference papers ersa11p528, European Regional Science Association.

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