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The OECD Directorate for Science, Technology and Innovation (STI) leads OECD research on the contribution of science, technology and industry to well-being and economic growth. STI Working Papers cover a broad range of topics including definition and measurement of science and technology indicators, global value chains, and research on policies to promote innovation. These technical or analytical working papers are prepared by staff or outside consultants to share early insights and elicit feedback.
An Empirical Contribution to Knowledge Production and Economic Growth
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- Kul B. Luintel, Mosahid Khan
- 14 Dec 2005
- Bibliographic information
We examine the dynamics of knowledge production for a panel of 19 OECD countries. A new and unique data set is used to proxy the domestic flows of “new-to-the-world” knowledge and ideas. We rigorously address the cross-country heterogeneity in the production of knowledge and the endogeneous nature of this process. The parameters of the knowledge production function point to large cross-country differences. Domestic and foreign stocks of knowledge and ideas have a net positive effect on the production (flows) of new ideas. Countries with a low domestic knowledge base appear to improve their TFP considerably through the accumulation of knowledge. This effect is very modest for countries that already have a sizeable domestic knowledge base. We find ample evidence of duplicate R&D but no support for endogenous growth. Given the heterogeneous nature of knowledge production across OECD countries, R&D policy will need to be adapted to the specific nature of each country; a one-size-fits-all approach will not be effective.
- dynamic heterogeneity, knowledge stocks, methods of moments
- JEL Classification:
- C15: Mathematical and Quantitative Methods / Econometric and Statistical Methods and Methodology: General / Statistical Simulation Methods: General
- F02: International Economics / General / International Economic Order and Integration
- F12: International Economics / Trade / Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation
- O3: Economic Development, Innovation, Technological Change, and Growth / Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights
- O4: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity