Absorptive Capacity in a Two-Sector Neo-Schumpeterian Model: A New Role for Innovation Policy

35 Pages Posted: 9 Mar 2018

See all articles by Isabel Almudi

Isabel Almudi

University of Zaragoza

Francisco Fatás-Villafranca

University of Zaragoza

Carlos Fernandez

Universidad Autónoma de Madrid

Jason Potts

RMIT University

Francisco J. Vázquez

Universidad Autonoma de Madrid

Date Written: March 4, 2018

Abstract

We propose a new co-evolutionary computational two-sector approach to the design of national innovation policy that recognizes the importance of inter-sectoral absorptive capacity constraints in innovation linkages between sectors in an economy. We show how the innovative capacity of an upstream producer sector can be constrained by the absorptive capacity of the downstream-user sector. This suggests that the low productivity performance of modern innovation policy might in part be understood as a consequence of sectorally unbalanced knowledge evolution, where the problem lies in underinvestment in innovative capabilities in the downstream sector. Our computational two-sector model suggests an important new role for innovation policy to create a balanced, sectorally-targeted approach.

Keywords: innovation, coevolution, Neo-Schumpeterian models, absorptive capacity

JEL Classification: B52, C63, O31

Suggested Citation

Almudi, Isabel and Fatás-Villafranca, Francisco and Fernandez, Carlos and Potts, Jason and Vázquez, Francisco J., Absorptive Capacity in a Two-Sector Neo-Schumpeterian Model: A New Role for Innovation Policy (March 4, 2018). Available at SSRN: https://ssrn.com/abstract=3134143 or http://dx.doi.org/10.2139/ssrn.3134143

Isabel Almudi

University of Zaragoza ( email )

Gran Via 2
Zaragoza, 50005
Spain

Francisco Fatás-Villafranca

University of Zaragoza ( email )

Zaragoza, 50005
Spain

Carlos Fernandez

Universidad Autónoma de Madrid ( email )

Campus Cantoblanco
C/Kelsen, 1
Madrid, Madrid 28049
Spain

Jason Potts (Contact Author)

RMIT University ( email )

Francisco J. Vázquez

Universidad Autonoma de Madrid ( email )

Facultad de Ciencias Económicas y Empresariales
Madrid
Spain
914975244 (Phone)

HOME PAGE: http://rincon.uam.es/cgi-bin/v2/dir.cgi

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