Do External Knowledge Spillovers Induce Firms’ Innovations? Evidence from Slovenia

Joze Damijan, Andreja Jaklič () and Matija Rojec

Chapter 3 in Multinationals, Clusters and Innovation, 2006, pp 27-47 from Palgrave Macmillan

Abstract: Abstract According to new growth theory, technological progress is endogenous and driven by an intentional investment of resources by profit-seeking firms. Still, innovation activities in firms depend heavily on external sources (Fagerberg, 2005). For most countries foreign sources of technology are of dominant importance for productivity growth (Eaton and Kortum, 1999; Keller, 2002). Therefore, economic analysis of innovation recognizes international knowledge flows (through FDI, trade, licensing and international technological collaborations) as important determinants of the development and diffusion of innovations. Here, the notion of technology and knowledge spillovers is central. It is based on theories of endogenous technical change of the early 1990s (Romer, 1990; Grossman and Helpman, 1991; Aghion and Howitt, 1998), claiming that the return to technological investments is partly private and partly public (Keller, 2004). Because of the non-rival character of technology, an innovation that is produced by one firm may also be used by another firm, without incurring very much additional cost (Smolny, 2000). These are technology or knowledge spillovers.

Keywords: Productivity Growth; Total Factor Productivity; Knowledge Spillover; Domestic Firm; Total Factor Productivity Growth (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-62494-8_3

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DOI: 10.1057/9780230624948_3

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