Impact of research and development-based knowledge and geographic spillovers on manufacturing growth in the United States
Williams, Martin, Prof.
Ph.D. (Doctor of Philosophy)
Department of Economics
Industrial productivity--United States; Research; Industrial--United States; Production functions (Economic theory)
This study provides empirical evidence of the impacts of both privately and publicly funded research and development activity on manufacturing output at the state level. The magnitudes of the effects of research and development (R&D) performed within a state—as well as the spillover effects of the innovative activities of neighboring states—may vary across states and regions. An understanding of these magnitudes has important policy and theoretical implications. For example, states have more control than firms or nations over policies designed to encourage the development and dissemination of knowledge. Furthermore, the existence of knowledge-related externalities will be easier to identify, as there are relatively few barriers to spillovers across states. The main objective of this study is to analyze empirically the effects of R&D on output growth, using data on the forty-eight contiguous US states over the period 1982–1996. Our analysis begins with the estimation of a translog production function that is extended to include two measures of knowledge stocks. One knowledge stock variable measures the accumulated knowledge that results from R&D activities undertaken within a state's borders; the other measures the stock of accumulated knowledge in neighboring states. Use of the translog production function allows us to recover state-by-state estimates of the resulting elasticities for each year in the sample. We then use these elasticity estimates to compare the impact of R&D-based knowledge on manufacturing output across the states and census regions of the United States. Generally, the results indicate that private R&D exerts both direct and spillover effects on state output. Furthermore, the effects of privately funded R&D performed within a state tend to exceed the spillover effects from similar activities undertaken by neighboring states. However, the magnitudes of these effects vary substantially across states. In particular, technology transfers flow from technologically developed states to the less technologically developed states, but not in the other direction. The evidence concerning the impact of domestic public research on state output is mixed. However, there is convincing evidence that publicly funded R&D generates substantial knowledge spillovers. Furthermore, the beneficial effects of privately financed R&D conducted at home exceed those of publicly funded R&D efforts. However, the spillover effects related to publicly financed knowledge capital have a larger impact on state output than spillovers resulting from private R&D. Our results suggest that total output could be increased either through a more efficient allocation of R&D resources, or a better understanding of a state's ability to adopt new technology.
Youngblood, Michael J., "The impact of R&D-based knowledge and geographic spillovers on manufacturing growth in the United States" (2003). Graduate Research Theses & Dissertations. 5871.
viii, 302 pages
Northern Illinois University
Rights Statement 2
NIU theses are protected by copyright. They may be viewed from Huskie Commons for any purpose, but reproduction or distribution in any format is prohibited without the written permission of the authors.