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Estimates of the Impact of Static and Dynamic Knowledge Spillovers on Regional Factor Productivity

James LeSage () and Manfred Fischer

International Regional Science Review, 2012, vol. 35, issue 1, 103-127

Abstract: The authors develop an empirical approach to examine static and dynamic knowledge externalities in the context of a regional total factor productivity (TFP) relationship. Static externalities refer to current period scale or industry-size effects that have been labeled localization externalities or region-size effects known as agglomeration externalities. Dynamic externalities refer to the relationship between accumulated or prior period knowledge and current levels of innovation, where past learning-by-doing makes innovation positively related to cumulative production over time. The empirical specification allows for the presence of both static and dynamic externalities and provides a way to assess the relative magnitude of spillovers associated with spillovers from these two types of knowledge externalities. The magnitude of own-region impacts and other-region (spillovers) can be assessed using scalar summary measures of the own- and cross-partial derivatives from the model. The authors find evidence supporting the presence of dynamic externalities as well as static, and the estimates suggest that dynamic externalities may have a larger magnitude of impact than static externalities.

Keywords: total factor productivity; knowledge spillovers; technological proximity; spatial Durbin model; European regions (search for similar items in EconPapers)
Date: 2012
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Working Paper: Estimates of the impact of static and dynamic knowledge spillovers on regional factor productivity (2011) Downloads
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