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Spillovers, Linkages and Technical Change

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  • Edward Wolff

Abstract

Using US input-output data for the period 1958-87, I find strong evidence that industry total factor productivity (TFP) growth is significantly related to the TFP performance of the supplying sectors, with an elasticity of almost 60%. R&D intensity is also found to be a significant determinant of industry TFP growth, with an estimated return of about 10-13% and the return to embodied R&D is estimated at 43%. Direct productivity spillovers, from the technological progress made by supplying sectors, appear to be more important than spillovers from the R&D performed by suppliers. They also play a key role in explaining changes in manufacturing TFP growth over time. Changes in the contribution made by direct productivity spillovers to TFP growth account for almost half of the slowdown in TFP growth in manufacturing from 1958-67 to 1967-77, and for 20% of the TFP growth recovery in this sector from 1967-77 to 1977-87. Changes in R&D intensity and embodied R&D are relatively unimportant in explaining movements in manufacturing TFP growth over these three periods.

Suggested Citation

  • Edward Wolff, 1997. "Spillovers, Linkages and Technical Change," Economic Systems Research, Taylor & Francis Journals, vol. 9(1), pages 9-23.
  • Handle: RePEc:taf:ecsysr:v:9:y:1997:i:1:p:9-23
    DOI: 10.1080/09535319700000002
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    References listed on IDEAS

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    1. Murray Brown, 1967. "Introduction to "The Theory and Empirical Analysis of Production"," NBER Chapters,in: The Theory and Empirical Analysis of Production, pages 3-13 National Bureau of Economic Research, Inc.
    2. Murray Brown, 1967. "The Theory and Empirical Analysis of Production," NBER Books, National Bureau of Economic Research, Inc, number brow67-1.
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    Cited by:

    1. Gerlagh, Reyer & Lise, Wietze, 2005. "Carbon taxes: A drop in the ocean, or a drop that erodes the stone? The effect of carbon taxes on technological change," Ecological Economics, Elsevier, vol. 54(2-3), pages 241-260, August.
    2. Magnani, Elisabetta, 2009. "How does technological innovation and diffusion affect inter-industry workers' mobility?," Structural Change and Economic Dynamics, Elsevier, vol. 20(1), pages 16-37, March.
    3. ten Raa, Thijs & Wolff, Edward N., 2000. "Engines of growth in the US economy," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 473-489, December.
    4. Elisabetta Magnani, 2006. "Technological diffusion, the diffusion of skill and the growth of outsourcing in US manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(7), pages 617-647.
    5. Edward N. Wolff, 2011. "Spillovers, Linkages, and Productivity Growth in the US Economy, 1958 to 2007," NBER Working Papers 16864, National Bureau of Economic Research, Inc.
    6. Ejermo, Olof, 2004. "Productivity Spillovers of R&D in Sweden," Working Paper Series in Economics and Institutions of Innovation 15, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    7. RM. Serrano & R. Paci & S. Usai, 2003. "Spatial distribution of innovation activity. The case of European regions," Working Paper CRENoS 200310, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    8. Ana Salomé García & Antonio Morillas & Carmen Rueda, 2005. "Relaciones interindustriales y difusión de la innovación: una aproximación desde la Teoría de Redes," Urban/Regional 0512005, University Library of Munich, Germany.
    9. repec:kap:jtecht:v:42:y:2017:i:6:d:10.1007_s10961-016-9528-x is not listed on IDEAS

    More about this item

    Keywords

    Embodied R&D; embodied total factor productivity growth; productivity; linkages; USA;

    JEL classification:

    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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