Estimates and inferences of knowledge capital impacts on regional total factor productivity

James P. LeSage, Manfred M. Fischer

    Publication: Working/Discussion Paper


    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.
    Original languageEnglish
    Place of PublicationVienna
    PublisherWU Vienna University of Economics and Business
    Publication statusPublished - 1 Jul 2010

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