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Stepping on toes in the production of knowledge: a meta-regression analysis

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  • Tiago Neves Sequeira
  • Pedro Cunha Neves

Abstract

Decreasing returns to scale in physical resources in the knowledge production function have been widely considered in the economic growth literature. However, given the heterogeneity of empirical results, it is difficult to assess its magnitude. We provide a meta-analysis of the value of the decreasing returns to physical resources in the knowledge production function (stepping-on-toes effect). This has important policy implications regarding the subsidization of R&D activities and policy measures to enable the diffusion of knowledge. We conclude that there is some evidence of publication bias. Moreover, the average effect size is quite small, around 0.2, which implies a high stepping-on-toes effect. This value tends to be higher when variables related to international linkages are present, resources allocated to R&D are measured by labour, the knowledge pool is proxied by population, and instrumental variable estimation techniques are employed. On the contrary, the average returns to scale estimate decreases when resources allocated to R&D are measured by population and when only rich countries are included in the sample.

Suggested Citation

  • Tiago Neves Sequeira & Pedro Cunha Neves, 2020. "Stepping on toes in the production of knowledge: a meta-regression analysis," Applied Economics, Taylor & Francis Journals, vol. 52(3), pages 260-274, January.
  • Handle: RePEc:taf:applec:v:52:y:2020:i:3:p:260-274
    DOI: 10.1080/00036846.2019.1644447
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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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