Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries

21 Pages Posted: 8 May 2006

See all articles by Richard Kneller

Richard Kneller

University of Nottingham

Philip Stevens

National Institute of Economic and Social Research (NIESR)

Abstract

In this paper, we examine the three facets of technology: its creation, dispersion and absorption. We investigate whether differences in absorptive capacity help to explain cross-country differences in the level of productivity. We utilize stochastic frontier analysis to investigate two potential sources of this inefficiency - differences in human capital and R&D - for nine industries in 12 Organization for Economic Co-operation and Development (OECD) countries over the period 1973-91. We find that inefficiency in production does indeed exist and it depends upon the level of human capital of the country's workforce. Evidence that the amount of R&D an industry undertakes is also important is less robust.

Suggested Citation

Kneller, Richard and Stevens, Philip, Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries. Oxford Bulletin of Economics & Statistics, Vol. 68, No. 1, pp. 1-21, February 2006. Available at SSRN: https://ssrn.com/abstract=881121 or http://dx.doi.org/10.1111/j.1468-0084.2006.00150.x

Richard Kneller (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Philip Stevens

National Institute of Economic and Social Research (NIESR) ( email )

2 Dean Trench Street
Smith Square
London SW1P 3HE
United Kingdom

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