The governance of localized knowledge externalities

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The governance of localized knowledge externalities

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Antonelli Cristiano () (University of Turin)
Pierpaolo Patrucco () (University of Turin)
Quatraro Francesco () (University of Turin)

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Abstract

This paper articulates the hypothesis that there is an optimal size of knowledge pools. Too little a density of innovation activities reduces the accessibility of external knowledge. Too large a density enhances congestion and reduces appropriability. Firms can benefit from actual increasing returns stemming from the indivisibility, replicability and non-exhaustibility of knowledge only when the size of innovation networks is comprised between the two extremes. The empirical evidence confirms that the output elasticity of knowledge, included in a typical Griliches production function, is itself a quadratic function of the size of innovation networks. Knowledge externalities do trigger increasing returns that are external to each firm, only within a well defined interval. Knowledge externalities are a property of the system into which firms are embedded. As such they are endogenous to the system and likely to exhibit specific properties related to the changing characteristics of the system itself. The quality of knowledge governance mechanisms in place plays a key role in assessing the actual size of the net positive effects of knowledge externalities.

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Paper provided by University of Turin in its series Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo Alberto. WP series with number 200801.

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Length: 28 pages
Date of creation: Jan 2008
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Handle: RePEc:uto:labeco:200801

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Article
- Cristiano Antonelli & Pier Paolo Patrucco & Francesco Quatraro, 2008. "The governance of localized knowledge externalities," International Review of Applied Economics, Taylor and Francis Journals, vol. 22(4), pages 479-498. [Downloadable!] (restricted)

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-03-08 (All new papers)
NEP-IPR-2008-03-08 (Intellectual Property Rights)
NEP-KNM-2008-03-08 (Knowledge Management & Knowledge Economy)
NEP-TID-2008-03-08 (Technology & Industrial Dynamics)
NEP-URE-2008-03-08 (Urban & Real Estate Economics)

References listed on IDEAS
Please 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.:

Antonelli Cristiano, 2003. "Localized technological change," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 200305, University of Turin. [Downloadable!]
Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1661-1707, December. [Downloadable!] (restricted)
Other versions:
- Zvi Griliches, 1991. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc. [Downloadable!]
Consoli, Davide, 2007. "Services and systemic innovation: a cross-sectoral analysis," Journal of Institutional Economics, Cambridge University Press, vol. 3(01), pages 71-89, April. [Downloadable!]
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Other versions:
- Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45 National Bureau of Economic Research, Inc. [Downloadable!]
Acs, Zoltan J. & Anselin, Luc & Varga, Attila, 2002. "Patents and innovation counts as measures of regional production of new knowledge," Research Policy, Elsevier, vol. 31(7), pages 1069-1085, September. [Downloadable!] (restricted)
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Other versions:
- Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Antonelli Cristiano, 2005. "Models of knowledge and systems of governance," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 200501, University of Turin. [Downloadable!]
Other versions:
- Antonelli, Cristiano, 2005. "Models of knowledge and systems of governance," Journal of Institutional Economics, Cambridge University Press, vol. 1(01), pages 51-73, June. [Downloadable!]
Abramovitz, Moses & David, Paul A, 1973. "Reinterpreting Economic Growth: Parables and Realities," American Economic Review, American Economic Association, vol. 63(2), pages 428-39, May. [Downloadable!] (restricted)
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Other versions:
- Nooteboom, B. & Vanheverbeke, W.P.M. & Duysters, G.M. & Gilsing, V.A. & Oord van den, A,J,, 2005. "Optimal cognitive distance and absorptive capacity," ECIS Working Papers 05.05, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology. [Downloadable!]
- Nooteboom, Bart & Vanhaverbeke, Wim & Duysters, Geert & Gilsing, Victor & Oord, Ad van den, 2006. "Optimal cognitive distance and absorptive capacity," Discussion Paper 33, Tilburg University, Center for Economic Research. [Downloadable!]
Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(1987-3), pages 783-832. [Downloadable!]
repec:fth:harver:1473 is not listed on IDEAS
Kaldor, Nicholas, 1975. "What Is Wrong with Economic Theory," The Quarterly Journal of Economics, MIT Press, vol. 89(3), pages 347-57, August. [Downloadable!] (restricted)
Patrucco Pier Paolo, 2005. "Collective knowledge production, costs and the dynamics of technological sysyems," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 200506, University of Turin. [Downloadable!]
Other versions:
- Pier Paolo Patrucco, 2009. "Collective knowledge production costs and the dynamics of technological systems," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 18(3), pages 295-310. [Downloadable!] (restricted)
Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-55, December. [Downloadable!] (restricted)
Romer, Paul M, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter. [Downloadable!] (restricted)

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Cited by:
(explanations, Please 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.)

Antonelli Cristiano & Ferraris Gianluigi, 2009. "Innovation as an emerging system property : an agent based model," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 200911, University of Turin. [Downloadable!]

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