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Stop Crying over Spilt Knowledge: A Critical Look at the Theory of Spillovers and Technical Change


Author Info

  • Richard N. Langlois

    (University of Connecticut)

  • Paul L. Robertson

    (University of New South Wales)


This essay analyzes critically the idea of knowledge spillovers, especially as it enters the New Growth Theory. The conventional theory of spillovers, we argue, suffers from a thin and misleading account of the nature of productive knowledge. In this model, firms undersupply R&D, which impedes economic growth and calls for research subsidies. We argue, by contrast, that a more subtle picture of the creation of knowledge, and the presence of network externalities (including true Marshallian external economies), tend to reverse the predictions of neoclassical theory: spillovers may actually lead to increases in the production of new knowledge.

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Bibliographic Info

Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 1996-06.

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Length: 34 pages
Date of creation: Aug 1996
Date of revision:
Handle: RePEc:uct:uconnp:1996-06

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Cited by:
  1. Havas, Attila, 2007. "The Interplay between Innovation and Production Systems at Various Levels: The case of the Hungarian automotive industry," MPRA Paper 52744, University Library of Munich, Germany.
  2. Juniper, James, 2007. "Philosophizing with a hammer? A critique of Mirowski's markomata informed by continental philosophy," Journal of Economic Behavior & Organization, Elsevier, vol. 63(2), pages 266-283, June.
  3. J. Rajendran Pandian & Paul L. Robertson, 2003. "Why look for a mirage when you already have an oasis?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(4), pages 325-334.
  4. Laranja, Manuel & Uyarra, Elvira & Flanagan, Kieron, 2008. "Policies for science, technology and innovation: Translating rationales into regional policies in a multi-level setting," Research Policy, Elsevier, vol. 37(5), pages 823-835, June.
  5. Garzarelli, Giampaolo & Limam, Yasmina Reem & Thomassen, Bjørn, 2007. "Open Source Software and Economic Growth: A Classical Division of Labor Perspective," MPRA Paper 3849, University Library of Munich, Germany.
  6. Boschma, Ron A., 1999. "The rise of clusters of innovative industries in Belgium during the industrial epoch," Research Policy, Elsevier, vol. 28(8), pages 853-871, November.


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