Estimates and Inferences of Knowledge Capital Impacts on Regional Total Factor Productivity

30 Pages Posted: 24 Sep 2010

See all articles by James P. LeSage

James P. LeSage

Texas State University - McCoy College of Business Administration

Manfred M. Fischer

Vienna University of Economics and Business - Institute for Economic Geography and GIScience, Department of Socioeconomics

Date Written: July 14, 2010

Abstract

This paper explores the contribution of knowledge capital to total factor productivity differences among regions within a regression framework. We provide an econometric derivation of the relationship and show that the presence of latent/unobservable regional knowledge capital leads to a model relationship that includes both spatial and technological dependence. This model specification accounts for both spatial and technological dependence between regions, which allows us to quantify spillover impacts arising from both types of interaction. Sample data on 198 NUTS-2 regions spanning the period from 1997 to 2002 was used to empirically test the model, to measure both direct and indirect effects of knowledge capital on regional total factor productivity, and to assess the relative importance of knowledge spillovers from spatial versus technological proximity.

Keywords: Total factor productivity, knowledge spillovers, technological proximity, spatial Durbin model, European regions

JEL Classification: C11, C21, O47, O52, R11

Suggested Citation

LeSage, James P. and Fischer, Manfred M., Estimates and Inferences of Knowledge Capital Impacts on Regional Total Factor Productivity (July 14, 2010). Available at SSRN: https://ssrn.com/abstract=1681316 or http://dx.doi.org/10.2139/ssrn.1681316

James P. LeSage

Texas State University - McCoy College of Business Administration ( email )

Finanace and Economics Department
601 University Drive
San Marcos, TX 78666
United States
512-245-0256 (Phone)
512-245-3089 (Fax)

HOME PAGE: http://www.spatial-econometrics.com

Manfred M. Fischer (Contact Author)

Vienna University of Economics and Business - Institute for Economic Geography and GIScience, Department of Socioeconomics ( email )

Welthandelsplatz 1, D4
Vienna, 1020
Austria

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