Quella, Núria (2007): Intra- and Inter-Sectoral Knowledge Spillovers and TFP Growth Rates.
Download (372kB) | Preview
In this paper I estimate unobserved labor-generated knowledge spillovers within and between six large macroeconomic sectors covering the US civilian economy from 1948 to 1991 and relate them to observed productivity changes. I construct a series of sectoral knowledge spillover matrices that show the changes in the magnitude and direction of intraand inter-sectoral spillovers for each sector. I show that the productivity slowdown in the US economy of the early seventies is associated with a decline of intra-sectoral spillovers and the emergence of inter-sectoral spillovers. This change coincides with trade taking over manufacturing as the main source and destination of new knowledge flows. The analysis of technology flows, measured as the production and use of patents, corroborates this finding. Furthermore, I also compute the gap between the market, which ignores knowledge spillovers, and the optimal allocation of labor across sectors, and the wedge between market and optimal wage rates by sector. I show that optimal employment in manufactures is 32% higher than the market allocation, and that optimal wages in the overall economy are 31% above market wages.
|Item Type:||MPRA Paper|
|Institution:||Instituto Tecnológico Autónomo de México (ITAM)|
|Original Title:||Intra- and Inter-Sectoral Knowledge Spillovers and TFP Growth Rates|
|Keywords:||Knowledge spillovers; technology; productivity slowdown|
|Subjects:||O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O30 - General
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
|Depositing User:||Nuria Quella|
|Date Deposited:||21. Apr 2007|
|Last Modified:||14. Feb 2013 00:53|
Arrow, K. (1962), ‘The Economic Implications of Learning by Doing’, Review of Economic Studies 29, 155—173. Bartelsman, E., Caballero, R. and Lyons, R. (1991), Short and Long Run Externalities. NBER Working Paper No. 3810. Bartelsman, E., Caballero, R. and Lyons, R. (1994), ‘Customer- and Supplier-Driven Externalities’, American Economic Review 84, 1075—1084. Basu, S. and Fernald, J. (1995), ‘Are Apparent Productive Spillovers a Figment of Specification Error?’, Journal of Monetary Economics 36(8), 165—188. Basu, S. and Fernald, J. (1997), ‘Returns to Scale in U.S. Production: Estimates and Implications’, Journal of Political Economy 105(2), 249—283. Baxter, M. and King, R. (1991), Productive Externalities and Business Cycles. Federal Reserve Bank of Minneapolis, Institute for Empirical Macroeconomics, Discussion Paper No. 53. Bernstein, J. (1988), ‘Costs of Production, Intra- and Interindustry R&D Spillovers: Canadian Evidence’, Canadian Journal of Economics 2, 324—347. Bernstein, J. and Nadiri, I. (1988), ‘Interindustry R&D Spillovers, Rates of Return, and Production in High-Tech Industries’, American Economic Review 78(2), 429—434. Bessen, J. (2002), ‘Technology Adoption Costs and Productivity Growth: The Transition to Information Technology’, Review of Economic Dynamics 5(2), 443—469. Caballero, R. and Lyons, R. (1992), ‘External Effects in U.S. Procyclical Productivity’, Journal of Monetary Economics 29(2), 209—225. Cockburn, I. and Henderson, R. (1998), ‘Absorptive Capacity, Coauthoring Behavior and the Organization of Research in Drug Discovery’, Journal of Industrial Economics 66(2), 157—182. Cohen, W. and Levinthal, D. (1990), ‘Absorptive Capacity: A New Perspective on Learning and Innovation’, Administrative Science Quarterly 35, 128—152. Comin, D. (2002), ‘Comments on James Bessen’s "Technology Adoption Costs and Productivity Growth: The Transition to Information Technology"’, Review of Economic Dynamics 5(2), 470—476. Corrado, C. and Slifman, L. (1999), ‘Decomposition of Productivity and Unit Costs’, American Economic Review 89(2), 328—332. Domowitz, I., Hubbard, R. and Petersen, J. (1988), ‘Market Structure and Cyclical Fluctuations in U.S. Manufacturing’, Review of Economics and Statistics 70, 55—66. Döring, T. and Schnellenbach, J. (2006), ‘What do we Know about Geographical Knowledge Spillovers and Regional Growth?: A Survey of the Literature’, Regional Studies 40(3), 375—395. Greenwood, J. and Yorukoglu, M. (1997), ‘1974’, Carnegie-Rochester Conference Series on Public Policy 46, 49—95. Hadlock, P., Hecker, D. and Gannon, J. (1991), ‘High Technology Employment: Another View’, Monthly Labor Review 7, 26—30. Hall, R. (1988), ‘The Relation Between Price and Marginal Cost in the U.S. Industry’, Journal of Political Economy 96, 921—948. Hall, R. (1990), Invariance Properties of Solow’s Productivity Residual, in P. Diamond, ed.,‘Growth, Productivity, Unemployment’, MIT Press, Cambridge. Hulten, C. R. (1973), ‘Divisia Index Numbers’, Econometrica 41, 1017—1025. Hulten, C. R. (2001), Total Factor Productivity: A Short Biography, in C. R. Hulten, E. R. Dean and M. J. Harper, eds, ‘New Directions in Productivity Analysis, Studies in Income and Wealth’, University of Chicago Press for the National Bureau of Economic Research, Chicago, IL. Jaffe, A., Trajtenberg, M. and Henderson, R. (1993), ‘Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations’, Quarterly Journal of Economics 108, 577—598. Jorgenson, D. W. (1990), Productivity and Economic Growth, in Ernst R. Berndt and Jack E. Triplett, eds, ‘Fifty Years of Economic Measurement: The Jubilee Conference on Research in Income and Wealth’, University of Chicago Press, Chicago, IL. Jorgenson, D. W., Gollop, F. and Fraumeni, B. (1987), Productivity and U.S. Economic Growth, Harvard University Press, Cambridge, MA. Jorgenson, D. W. and Griliches, Z. (1967), ‘The Explanation of Productivity Change’, Review of Economic Studies 34, 249—280. Jorgenson, D. W., Ho, M. and Fraumeni, B. (1994), The Quality of the U.S. Workforce, 1948-90. Cambridge, NBER Summer Institute on Productivity. Jorgenson, D. W. and Stiroh, K. J. (1994), Investment in Computers and U.S. Economic Growth. Harvard University, Institute of Economic Research, Discussion Paper No. 1707. Jorgenson, D. W. and Stiroh, K. J. (2000), ‘Raising the Speed Limit: U.S. Economic Growth in the Information Age’, Brookings Papers on Economic Activity 1, 125—211. Jovanovic, B. and Nyarko, Y. (1995), ‘The Transfer of Human Capital’, Journal of Economic Dynamics and Control 19(5), 1033—1064. Jovanovic, B. and Rousseau, P. (2002), ‘Moore’s Law and Learning by Doing’, Review of Economic Dynamics 5, 346—375. Klenow, P. (1998), ‘Learning Curves and the Cyclical Behavior of Manufacturing Industries’, Review of Economic Dynamics 1, 531—550. Kortum, S. (1995), Data on Canadian and U.S. Patent Application, 1957-1983. Kortum, S. (1997), ‘1974, A Comment’, Carnegie-Rochester Conference Series on Public Policy 46, 97—105. Lieberman, M. (1984), ‘The Learning Curve and Pricing in the Chemical Processing Industries’, Rand Journal of Economics 15, 213—228. Long, J. and Plosser, C. (1983), ‘Real Business Cycles’, Journal of Political Economy 91(1), 39—69. Mansfield, E., Romeo, A., Schwartz, M., Teece, D., Wagner, S. and Brach, P. (1982), Technology Transfer, Productivity, and Economic Policy, Norton, New York. Moretti, E. (2000), Estimating the Social Return to Higher Education. NBER Working Paper No. 9018. Moretti, E. (2004a), ‘Estimating the External Return to Higher Education: Evidence from Cross-sectional and Longitudinal Data’, Journal of Econometrics 121(1), . Moretti, E. (2004b), Human Capital Externalities in Cities, in J. Henderson and J.-F. Thisse, eds, ‘Handbook of Urban and Regional Economics’, North Holland, New York. Morrison, C. (1993), ‘Productive and Financial Performance in the U.S. Manufacturing Industries: An Integrated Structural Approach’, Southern Economic Journal 60(2), 376— 392. Scherer, F. (1984), Using Linked Patent and R&D Data to Measure Interindustry Technology Flows, in Z. Griliches, ed., ‘R&D, Patents, and Productivity’, University of Chicago Press. Thompson, P. and Fox-Kean, M. (2005), ‘Patent Citations and the Geography of Knowledge Spillovers: A Reassessment’, American Economic Review 95(1), 450—460. van Stel, A. and Nieuwenhuijsen, H. (2004), ‘Knowledge Spillovers and Economic Growth: An Analysis Using Data of Dutch Regions in the Period 1987-1995’, Regional Studies 38, 393—407. Zucker, L., Darby, M. and Brewer, M. (1998), ‘Intellectual Human Capital and the Birth of US Biotechnology Enterprises’, American Economic Review 88(1), 290—306.