Innovative and absorptive capacity effects of education in a small open economy
AbstractEvidence points to relatively low supply elasticities for workers skilled for research and development (R&D), which can hamper innovation and growth. Increasing the supply of R&D skills will expand an economy's innovative capacity. A simultaneous effect of increased education, which is particularly important for small, open economies, is to raise final goods producers’ capacity to absorb cross-border knowledge spillovers. In a calibrated endogenous growth model for Norway, we find that increasing the share of highly educated workers has pronounced absorptive capacity effects that partially crowd out R&D-based innovation. Both innovative and absorptive capacity expansions contribute to higher growth and welfare.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 694.
Date of creation: Jun 2012
Date of revision:
Absorptive capacity; Computable general equilibrium model; Endogenous growth; Human capital; Innovation; Research and Development;
Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-08 (All new papers)
- NEP-DGE-2012-07-08 (Dynamic General Equilibrium)
- NEP-EDU-2012-07-08 (Education)
- NEP-FDG-2012-07-08 (Financial Development & Growth)
- NEP-INO-2012-07-08 (Innovation)
- NEP-KNM-2012-07-08 (Knowledge Management & Knowledge Economy)
- NEP-SBM-2012-07-08 (Small Business Management)
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