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Technology Flows Matrix Estimation Revisited


  • Frederic Scherer


This paper revisits the methodological problems of estimating matrices showing how technological advances--measured by industry research and development outlays--flow from industries of origin to using industries. An early effort relied upon the analysis of 15 112 US patents. Several alternative methods are explored to address methodological questions concerning the choice of carrier matrices, the handling of diagonal elements, and the treatment of capital goods flows. Technology flow matrices estimated using diverse combinations of assumptions are tested for goodness-of-fit relative to the original patent-based matrix and for their ability to "predict' productivity growth in Solowian regression equations. Although some anomalies emerge, the best results are obtained using combined first-order transactions and capital flows matrices with diagonal elements adjusted to reflect the ratio of internal process to all R&D spending. However, flow data compiled using the Leontief inverse matrix add explanatory power in productivity growth regressions.

Suggested Citation

  • Frederic Scherer, 2003. "Technology Flows Matrix Estimation Revisited," Economic Systems Research, Taylor & Francis Journals, vol. 15(3), pages 327-358.
  • Handle: RePEc:taf:ecsysr:v:15:y:2003:i:3:p:327-358 DOI: 10.1080/0953531032000111790

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    References listed on IDEAS

    1. Edwin Mansfield & John Rapoport & Anthony Romeo & Samuel Wagner & George Beardsley, 1977. "Social and Private Rates of Return from Industrial Innovations," The Quarterly Journal of Economics, Oxford University Press, vol. 91(2), pages 221-240.
    2. Adam B. Jaffe & Manuel Trajtenberg, 2005. "Patents, Citations, and Innovations: A Window on the Knowledge Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026260065x, July.
    3. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    4. Robert Evenson & Daniel Johnson, 1997. "Introduction: Invention Input-Output Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 9(2), pages 149-160.
    5. Daniel Johnson & Robert Evenson, 1997. "Innovation and Invention in Canada," Economic Systems Research, Taylor & Francis Journals, vol. 9(2), pages 177-192.
    6. Dietmar Harhoff, 1996. "Strategic Spillovers and Incentives for Research and Development," Management Science, INFORMS, vol. 42(6), pages 907-925, June.
    7. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    8. Scherer, F M, 1982. "Inter-Industry Technology Flows and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 627-634, November.
    9. Samuel Kortum & Jonathan Putnam, 1997. "Assigning Patents to Industries: Tests of the Yale Technology Concordance," Economic Systems Research, Taylor & Francis Journals, vol. 9(2), pages 161-176.
    10. repec:fth:harver:1487 is not listed on IDEAS
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    Cited by:

    1. Peilei Fan, 2011. "Innovation capacity and economic development: China and India," Economic Change and Restructuring, Springer, vol. 44(1), pages 49-73, April.
    2. López-Pueyo, Carmen & Barcenilla-Visús, Sara & Sanaú, Jaime, 2008. "International R&D spillovers and manufacturing productivity: A panel data analysis," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 152-172, June.
    3. Giovanni Cerulli & Bianca Poti`, 2009. "Measuring Intersectoral Knowledge Spillovers: An Application Of Sensitivity Analysis To Italy," Economic Systems Research, Taylor & Francis Journals, vol. 21(4), pages 409-436.
    4. Francisco Mas-Verdú & Anthony Wensley & Martin Alba & José García Álvarez-Coque, 2011. "How much does KIBS contribute to the generation and diffusion of innovation?," Service Business, Springer;Pan-Pacific Business Association, vol. 5(3), pages 195-212, September.


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