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Regional Innovative Capacity with Endogenous Employment: Empirical Evidence from the U.S

Author

Listed:
  • Riddel, Mary

    (Center for Business and Econ Research, U NV, Las Vegas)

  • Schwer, R. Keith

    (Center for Business and Econ Research, U NV, Las Vegas)

Abstract

Using the endogenous growth model proposed by Romer (1990) and operationalized by Stern, Porter, and Furman (2000), we seek to identify factors that affect innovative capacity in the U.S. We find strong evidence of endogeneity between employment growth and innovative capacity. In response, we estimate a generalized two-stage random effects model of hi-tech employment and patenting activity. We find that the stock of knowledge (standing on shoulders effect), industry R&D expenditures, and the number of high-tech employees explain the rate of change of innovation among the states during the 1990s. The stock of human capital also influences the innovation rate. Our findings suggest that patenting activity and wages in the high-tech sector are the primary forces influencing the demand for high-tech labor.

Suggested Citation

  • Riddel, Mary & Schwer, R. Keith, 2003. "Regional Innovative Capacity with Endogenous Employment: Empirical Evidence from the U.S," The Review of Regional Studies, Southern Regional Science Association, vol. 33(1), pages 73-84.
  • Handle: RePEc:rre:publsh:v:33:y:2003:i:1:p:73-84
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    References listed on IDEAS

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    1. Chad R. Wilkerson, 2002. "How high tech is the Tenth District?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 1-27.
    2. Balestra, Pietro & Varadharajan-Krishnakumar, Jayalakshmi, 1987. "Full Information Estimations of a System of Simultaneous Equations with Error Component Structure," Econometric Theory, Cambridge University Press, vol. 3(02), pages 223-246, April.
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    Citations

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    Cited by:

    1. Barkley, David L. & Henry, Mark S. & Lee, Doohee, 2006. "Innovative activity in rural areas: the importance of local and regional characteristics," Community Development Investment Review, Federal Reserve Bank of San Francisco, issue 3, pages 1-14.
    2. Brown, Stephen P. A. & Hayes, Kathy J. & Taylor, Lori L., 2003. "State and Local Policy, Factor Markets, and Regional Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 33(1), pages 40-60.
    3. Mauro L. Ghinamo, 2012. "Explaining The Variation In The Empirical Estimates Of Academic Knowledge Spillovers," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 606-634, October.
    4. Laura de Dominicis & Raymond J.G.M. Florax & Henri L.F. de Groot, 2013. "Regional clusters of innovative activity in Europe: are social capital and geographical proximity key determinants?," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2325-2335, June.
    5. Robert Huggins & Andrew Johnston & Rebecca Steffenson, 2008. "Universities, knowledge networks and regional policy," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(2), pages 321-340.
    6. Partridge, Mark D. & Rickman, Dan S., 2003. "Do We Know Economic Development When We See It?," The Review of Regional Studies, Southern Regional Science Association, vol. 33(1), pages 17-39.
    7. Sleuwaegen, Leo & Boiardi, Priscilla, 2014. "Creativity and regional innovation: Evidence from EU regions," Research Policy, Elsevier, vol. 43(9), pages 1508-1522.
    8. Andrés Rodríguez-Pose & Marco Di Cataldo, 2015. "Quality of government and innovative performance in the regions of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 673-706.
    9. Lo, Chu-Ping, 2016. "Intellectual property, research intensity, and scale effect," Journal of Business Research, Elsevier, vol. 69(6), pages 2297-2301.
    10. Barkley, David L. & Henry, Mark S. & Lee, DooHee, 2006. "Innovative Activity in Rural Areas: The Role of Local and Regional Characteristics," REDRL Research Reports 113802, Clemson University, Regional Economic Development Research Laboratory (REDRL).
    11. Laura de Dominicis & Raymond J.G.M. Florax & Henri L.F. de Groot, 2011. "Regional Clusters of Innovative Activity in Europe: Are Social Capital and Geographical Proximity the Key Determinants?," Tinbergen Institute Discussion Papers 11-009/3, Tinbergen Institute.
    12. Jose M. Pastor & Juan Fernández de Guevara & Francisco Pérez, 2010. "Measuring the local economic impact of universities: an approach that considers uncertainty," Investigaciones de Economía de la Educación volume 5,in: María Jesús Mancebón-Torrubia & Domingo P. Ximénez-de-Embún & José María Gómez-Sancho & Gregorio Gim (ed.), Investigaciones de Economía de la Educación 5, edition 1, volume 5, chapter 54, pages 1061-1090 Asociación de Economía de la Educación.
    13. Fernandes, Cristina & Ferreira, João, 2011. "Knowledge Spillovers and Knowledge Intensive Business Services: An Empirical Study," MPRA Paper 34751, University Library of Munich, Germany.
    14. Breandán Ó hUallacháin & Timothy F. Leslie, 2007. "Rethinking the regional knowledge production function," Journal of Economic Geography, Oxford University Press, vol. 7(6), pages 737-752, November.

    More about this item

    Keywords

    R&D; Regional;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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