Regional Growth, Innovation and Latent Nonlinear Effects

51 Pages Posted: 24 Nov 2014 Last revised: 17 Mar 2016

See all articles by Marcos Sanso-Navarro

Marcos Sanso-Navarro

Universidad de Zaragoza

María Vera-Cabello

Centro Universitario de la Defensa de Zaragoza

Multiple version iconThere are 2 versions of this paper

Date Written: March 17, 2016

Abstract

This paper studies the link between knowledge, innovation and growth in European regions using nonparametric methods. Our findings suggest that knowledge inputs and the share of innovative firms have a heterogeneous and nonlinear relationship with growth. This evidence has been exploited to examine the consequences of alternative policies using a counterfactual estimation setup, the results of which imply that increasing the formal knowledge base may be optimal in most regions. Less knowledge and innovation intensive regions will also benefit from a higher innovation potential and from a trustworthy and entrepreneurial economic environment. As a byproduct of our analysis, we show that the gradients obtained from a local-linear kernel regression can be used to identify clusters of spatial association.

Keywords: Regional growth, innovation, nonparametric methods, nonlinearities, policy evaluation

JEL Classification: C14, O18, O30, R11

Suggested Citation

Sanso-Navarro, Marcos and Vera-Cabello, María, Regional Growth, Innovation and Latent Nonlinear Effects (March 17, 2016). Available at SSRN: https://ssrn.com/abstract=2529733 or http://dx.doi.org/10.2139/ssrn.2529733

Marcos Sanso-Navarro (Contact Author)

Universidad de Zaragoza ( email )

Facultad de Economía y Empresa
Departamento de Análisis Económico
Zaragoza, 50005
Spain
+34 876 554 629 (Phone)

HOME PAGE: http://personal.unizar.es/marcossn

María Vera-Cabello

Centro Universitario de la Defensa de Zaragoza ( email )

Academia General Militar, Ctra. de Huesca, s/n
Zaragoza, Zaragoza 50009
Spain

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