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Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth

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  • Narula, Rajneesh

    (MERIT)

Abstract

This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro–level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation.

Suggested Citation

  • Narula, Rajneesh, 2004. "Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth," Research Memorandum 004, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:umamer:2004004
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    More about this item

    Keywords

    economics of technology ;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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