Augmented and Unconstrained: revisiting the Regional Knowledge Production Function

Sylvie Charlot, Riccardo Crescenzi and Antonio Musolesi ()

No 2414, SEEDS Working Papers from SEEDS, Sustainability Environmental Economics and Dynamics Studies

Abstract: By adopting a semiparametric approach, the 'traditional' regional knowledge production function is developed in three complementary directions. First, the model is augmented with region-speci c time trends in order to account for endogeneity due to selection on unobservables. Second, the nonparametric part of the model relaxes the standard assumptions of linearity and additivity regarding the effect of R&D and human capital. Finally, the assumption of homogeneity in the effects of R&D and human capital is also relaxed by explicitly accounting for the differences between developed and lagging regions. The analysis of the genesis of innovation in the regions of the European Union unveils nonlinearities and threshold effects, complex interactions, and shadows effects that cannot be uncovered by standard parametric formulations.

Keywords: Innovation; Europe; R&D; Regional knowledge production function; Semiparametric models (search for similar items in EconPapers)
JEL-codes: C14 C23 O32 R11 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014-08, Revised 2014-08
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ino and nep-ure
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http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/2414.pdf First version, 2014 (application/pdf)
http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/2414.pdf Revised version, 2014 (application/pdf)

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