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Econometric modelling of the regional knowledge production function in Europe

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  • Sylvie Charlot
  • Riccardo Crescenzi
  • Antonio Musolesi

Abstract

By adopting a semiparametric approach, the ‘traditional’ regional knowledge production function is developed in three complementary directions. First, the model is augmented with region-specific time trends to account for endogeneity due to selection on unobservables. Second, the nonparametric part of the model relaxes the standard assumptions of linearity and additivity regarding the effect of R&D and human capital. Finally, the assumption of homogeneity in the effects of R&D and human capital is also relaxed by explicitly accounting for the differences between developed and lagging regions. The analysis of the genesis of innovation in the regions of the European Union unveils nonlinearities, threshold effects, complex interactions and shadow effects that cannot be uncovered by standard parametric formulations.

Suggested Citation

  • Sylvie Charlot & Riccardo Crescenzi & Antonio Musolesi, 2015. "Econometric modelling of the regional knowledge production function in Europe," Journal of Economic Geography, Oxford University Press, vol. 15(6), pages 1227-1259.
    • Handle: RePEc:oup:jecgeo:v:15:y:2015:i:6:p:1227-1259.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbu035
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    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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