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Knowledge and Productivity in the World's Largest Manufacturing Corporations

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Abstract

I examine the relationship between the characteristics of firm knowledge in terms of capital, diversity and relatedness, and productivity. Panel data regression models suggest that unlike knowledge diversity, knowledge capital and knowledge relatedness explain a substantial share of the variance of firm productivity. Activities based on a set of related technological knowledge are more productive than those based on unrelated knowledge because the cost of co-ordinating productive activities decreases as the knowledge used in these activities becomes integrated efficiently. The contribution of knowledge relatedness to productivity is significantly higher in high-technology sectors than in other sectors.

Suggested Citation

  • Lionel Nesta, 2004. "Knowledge and Productivity in the World's Largest Manufacturing Corporations," SPRU Working Paper Series 119, SPRU - Science and Technology Policy Research, University of Sussex.
    • Handle: RePEc:sru:ssewps:119
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    Keywords

    knowledge; productivity; large corporations; knowledge measurement; panel data;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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