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The dynamics of knowledge diversity and economic growth

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  • Berliant, Marcus
  • Fujita, Masahisa

Abstract

How is long run economic growth related to the endogenous diversity of knowledge? We formulate and study a microeconomic model of knowledge creation, through the interactions among a group of heterogeneous R & D workers, embedded in a growth model to address this question. In contrast with the traditional literature, in our model the composition of the research work force in terms of knowledge heterogeneity matters, in addition to its size, in determining the production of new knowledge. Moreover, the heterogeneity of the work force is endogenous. Income to these workers accrues as patent income, whereas transmission of newly created knowledge to all such workers occurs due to public transmission of patent information. Knowledge in common is required for communication, but differential knowledge is useful to bring originality to the endeavor. Whether or not the system reaches the most productive state depends on the strength of the public knowledge transmission technology. Equilibrium paths are found analytically. Long run economic growth is positively related to both the effectiveness of pairwise R & D worker interaction and to the effectiveness of public knowledge transmission.

Suggested Citation

  • Berliant, Marcus & Fujita, Masahisa, 2009. "The dynamics of knowledge diversity and economic growth," MPRA Paper 16475, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16475
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    References listed on IDEAS

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    Cited by:

    1. Max Nathan & Neil Lee, 2013. "Cultural Diversity, Innovation, and Entrepreneurship: Firm-level Evidence from London," Economic Geography, Clark University, vol. 89(4), pages 367-394, October.
    2. Neil Lee & Max Nathan, 2011. "Does Cultural Diversity Help Innovation in Cities: Evidence from London Firms," SERC Discussion Papers 0069, Centre for Economic Performance, LSE.
    3. Nathan, Max, 2011. "Ethnic inventors, diversity and innovation in the UK: evidence from patents microdata," LSE Research Online Documents on Economics 58329, London School of Economics and Political Science, LSE Library.
    4. Marcus Berliant & Chia-Ming Yu, 2015. "Locational Signaling And Agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 55(5), pages 757-773, November.
    5. Berliant, Marcus & Fujita, Masahisa, 2012. "Culture and diversity in knowledge creation," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 648-662.
    6. Ryusuke Ihara, 2011. "Agglomeration with the pros and cons of labor heterogeneity," ERSA conference papers ersa11p528, European Regional Science Association.
    7. Max Nathan, 2013. "Top Team Demographics, Innovation And Business Performance: Findings From English Firms And Cities, 2008-9," ERSA conference papers ersa13p69, European Regional Science Association.
    8. Florian Noseleit & Rene Söllner, 2011. "Diversity of human capital and regional growth," ERSA conference papers ersa10p245, European Regional Science Association.
    9. Siliang Guo & Heng Ma, 2022. "Can the Spatial Function Division of Urbanization Promote Regional Coordinated Development? Evidence from the Yangtze River Economic Belt in China," Sustainability, MDPI, vol. 14(12), pages 1-28, June.
    10. Nathan, Max, 2013. "Top team demographics, innovation and business performance: findings from English firms and cities 2008-9," LSE Research Online Documents on Economics 59250, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    knowledge creation; knowledge externalities; microfoundations of endogenous growth; knowledge diversity and growth;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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