On specifying heterogeneity in knowledge production functions
Within the Geography of Innovation literature, the Knowledge Production Function approach has become a reference framework to investigate the presence of localized knowledge spillovers and spatial econometric tools have been applied to study interregional spillovers. A linear specification for the KPF is assumed linking patents to R&D expenditure. This approach however suffers of different drawbacks. First patent applications are count data in nature. Patents per inhabitants may produce an unrealistic picture of the spatial distribution of innovative activities. Secondly, spatial heterogeneity is not usually observed, producing both omitted variables bias and spatial correlation in the error structure. Third, a positive R&D-patents linkage may arise as a spurious correlation if market size is not observed, causing R&D to be endogenous. This paper uses a regional cross section model to study the spatial distribution of high tech patents across 232 European regions in the period 2005/2006 to address these issues. Two main processes drive technological change in the model: research activities and knowledge generated outside firms and in a second moment embedded through either formal or informal acquisition. Among the different knowledge sources we particularly focus on the role of firms working in Knowledge Intensive Business Services and on that of universities. In developing the empirical model we take into account that a) patents are count data; b) the exclusion of market size will cause biased and inconsistent model parameters estimates; c) estimates of interregional spillovers may be biased by the omission of heterogeneity in the model specification. Empirical results indicate that, as expected, a count data distribution best fits the data, producing less spatially autocorrelated residuals. Regional innovative activity is explained by both investments in research and localization of KIBS, but only the first generates positive interregional externalities. Scientific universities do not directly affect the production of new knowledge. However, different knowledge production processes characterize regions with and without scientific universities, with R&D driving innovation in the sooner and KIBS in the latter. Finally, most of what are assumed to be interregional spillovers reveal to be, at a more careful inquiry, effect due to unaccounted spatial heterogeneity in regional innovation.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zvi Griliches, 1979.
"Issues in Assessing the Contribution of Research and Development to Productivity Growth,"
Bell Journal of Economics,
The RAND Corporation, vol. 10(1), pages 92-116, Spring.
- Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45 National Bureau of Economic Research, Inc.
- Manishi Prasad & Peter Wahlqvist & Rich Shikiar & Ya-Chen Tina Shih, 2004. "A," PharmacoEconomics, Springer Healthcare | Adis, vol. 22(4), pages 225-244.
- G�ran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
- Lydia Greunz, 2003.
"Geographically and technologically mediated knowledge spillovers between European regions,"
The Annals of Regional Science,
Springer, vol. 37(4), pages 657-680, December.
- Lydia Greunz, 2003. "Geographically and technologically mediated knowledge spillovers between European regions," ULB Institutional Repository 2013/9463, ULB -- Universite Libre de Bruxelles.
- Slavtchev, Viktor & Fritsch, Michael, 2005. "The Role of Regional Knowledge Sources for Innovation: An Empirical Assessment," Freiberg Working Papers 2005,15, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
- Breschi, Stefano & Lissoni, Francesco, 2000.
"Knowledge Spillovers And Local Innovation Systems: A Critical Survey,"
ERSA conference papers
ersa00p362, European Regional Science Association.
- Breschi, Stefano & Lissoni, Francesco, 2001. "Knowledge Spillovers and Local Innovation Systems: A Critical Survey," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 975-1005, December.
- Stefano Breschi & Francesco Lissoni, 2001. "Knowledge spillovers and local innovation systems: a critical survey," LIUC Papers in Economics 84, Cattaneo University (LIUC).
- Nickerson, Jack A., 1999. "Learning by Doing in Markets, Firms, and Countries. Edited by Naomi R. Lamoreaux, Daniel M. G. Raff, and Peter Temin. A National Bureau of Economic Research conference report. Chicago: University of C," The Journal of Economic History, Cambridge University Press, vol. 59(03), pages 854-855, September.
- Bottazzi, Laura & Peri, Giovanni, 2003.
"Innovation and spillovers in regions: Evidence from European patent data,"
European Economic Review,
Elsevier, vol. 47(4), pages 687-710, August.
- Laura Bottazzi & Giovanni Peri, . "Innovation and Spillovers in Regions: Evidence from European Patent Data," Working Papers 215, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Naomi R. Lamoreaux & Daniel Raff & Peter Temin, 1999. "Introduction to "Learning by Doing in Markets, Firms, and Countries"," NBER Chapters, in: Learning by Doing in Markets, Firms, and Countries, pages 1-18 National Bureau of Economic Research, Inc.
- Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-70, December.
- Jaffe, A.B. & Trajtenberg, M., 1992.
"Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,"
14-92, Tel Aviv.
- Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
- Rosina Moreno & Raffaele Paci & Stefano Usai, 2004.
"Spatial spillovers and innovation activity in European regions,"
ERSA conference papers
ersa04p588, European Regional Science Association.
- Rosina Moreno & Raffaele Paci & Stefano Usai, 2005. "Spatial spillovers and innovation activity in European regions," Environment and Planning A, Pion Ltd, London, vol. 37(10), pages 1793-1812, October.
- Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
- J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar.
- Michael Fritsch & Viktor Slavtchev, 2007.
"Universities and Innovation in Space,"
Industry and Innovation,
Taylor & Francis Journals, vol. 14(2), pages 201-218.
- Naomi R. Lamoreaux & Kenneth L. Sokoloff, 1997.
"Inventors, Firms, and the Market for Technology in the Late Nineteenth and Early Twentieth Centuries,"
NBER Historical Working Papers
0098, National Bureau of Economic Research, Inc.
- Naomi R. Lamoreaux & Kenneth L. Sokoloff, 1999. "Inventors, Firms, and the Market for Technology in the Late Nineteenth and Early Twentieth Centuries," NBER Chapters, in: Learning by Doing in Markets, Firms, and Countries, pages 19-60 National Bureau of Economic Research, Inc.
- Naomi R. Lamoreauxn & Daniel M.G. Raff & Peter Temin, 1999. "Review article – Learning by Doing in Markets, Firms and Countries," Journal of Economic Studies, Emerald Group Publishing, vol. 26(6), pages 497-509, October.
- Tomas Del Barrio-Castro & Jose Garcia-Quevedo, 2005. "Effects of university research on the geography of innovation," Regional Studies, Taylor & Francis Journals, vol. 39(9), pages 1217-1229.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p1114. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.