The Relationship between TFP and Innovation Performance : Evidence from EU Regions

• Autorzy: Tomasz Kijek , Anna Matras-Bolibok
• Języki publikacji: EN

Abstrakty

EN

Research background: Total factor productivity (TFP) determines how efficiently and intensely the available inputs are used and combined in production process. Improvement of TFP performance requires identification of its determinants, thus enabling policy actions to focus on them. Since the ability to create and absorb innovation is considered as a crucial factor of economic development, the investigation of the impact of the level of regional innovative performance on TFP distribution across EU regions is an important research problem.
Purpose of the article: The aim of the paper is twofold. Firstly, we attempt to develop a theoretical framework for the analysis of the impact of innovation on TFP. Secondly, we assess TFP levels for regions in the EU and investigate whether innovations account for the observed regional disparities in TFP.
Methods: The research sample consists of 202 European Union (EU) regions at NUTS 1 and NUTS 2 level from 22 countries. The regional data on GDP, employment and gross fixed capital formation come from the Eurostat. The source of data on the level of innovativeness of European regions is the Regional Innovation Scoreboard. To calculate TFP, we use the multiplicatively complete Färe-Primont index. In turn, to examine the impact of innovation on TFP, we employ the spatially-lagged X model.
Findings & Value added: Our findings show a high degree of dispersion in TFP across EU regions. We find a positive impact of regional innovation performance on TFP. Although theoretical papers on economic development and regional economics suggest that improvements in TFP are key to regional economic performance, and that innovations are crucial to gain such productivity effects, there is a dearth of empirical studies on the link between innovation and TFP at the regional level. Therefore, our paper attempts to fill this gap by providing the evidence of positive effect of innovation externalities on TFP in European regions. (original abstract)

Słowa kluczowe

EN

Total Factor Productivity (TFP); Innovations; Knowledge

PL

Produktywność czynników wytwórczych; Innowacje; Wiedza

• Czasopismo: Equilibrium
• Rocznik: 2019
• Tom: 14
• Numer: nr 4
• Strony: 695--709

Twórcy

autor

Tomasz Kijek

• Maria Curie-Skłodowska University in Lublin, Poland

autor

Anna Matras-Bolibok

• Uniwersytet Marii Curie-Skłodowskiej w Lublinie

Bibliografia

• Aghion, P., & Howitt, P. (2006). Appropriate growth policies: a unifying framework. Journal of the European Economic Association, 4(2-3). doi: 10.1162/jeea.2006.4.2-3.269.
• Arrow, K. (1969). Classificatory notes on the production and transmission of technical knowledge. American Economic Review, Papers and Proceedings, 59.
• Arthur, B. (1994). Increasing returns and path dependence in the economy. Ann Arbor: The University of Michigan Press.
• Atella, V., & Quintieri, B. (2001). Do R&D expenditures really matter for TFP?, Applied Economics, 33(11). doi: 10.1080/00036840010007939.
• Audretsch, D., & Feldman, M. (1996). R&D spillovers and the geography of innovation and production. American Economic Review, 86.
• Bengoa, M., Martínez-San Román, V., & Pérez, P. (2017). Do R&D activities matter for productivity? A regional spatial approach assessing the role of human and social capital. Economic Modelling, 60. doi: 10.1016/j.econmod.2016.09.005.
• Beugelsdijk, S. (2007). The regional environment and a firm's innovative performance: a plea for a multilevel interactionist approach. Economic Geography, 83(2). doi: 10.1111/j.1944-8287.2007.tb00342.x.
• Beugelsdijk, S., Klasing, M. J., & Milionis, P. (2018). Regional economic development in Europe: the role of total factor productivity. Regional Studies, 52(4). doi: 10.1080/00343404.2017.1334118.
• Coe, D. T., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39(5). doi: 10.1016/0014-2921(94)00100-E.
• Crevoisier, O. (2004). The innovative milieus approach: toward a territorialized understanding of the economy? Economic Geography, 80(4). doi: 10.1111/j.1944-8287.2004.tb00243.x.
• Dettori, B., Marrocu, E., & Paci, R. (2012). Total factor productivity, intangible assets and spatial dependence in the European regions. Regional Studies, 46(10). doi: 10.1080/00343404.2010.529288.
• Di Liberto, A., & Usai, S. (2013). TFP convergence across European regions: a comparative spatial dynamics analysis. In: R. Crescenzi & M. Percoco (Eds). Geography, institutions and regional economic performance. Advances in spatial science (The regional science series). Berlin, Heidelberg: Springer.
• Dosi, G. (1988). Sources, procedures, and microeconomic effects of innovation. Journal of Economic Literature, 26.
• Elhorst, J. P. (2010). Applied spatial econometrics: raising the bar. Spatial Economic Analysis, 5(1). doi: 10.1080/17421770903541772.
• Fischer, M. M., Scherngell, T., & Reismann M. (2009). Knowledge spillovers and total factor productivity: evidence using a spatial panel data model. Geographical Analysis, 41. doi: 10.1111/j.1538-4632.2009.00752.x.
• Frenz, M., & Oughton, C. (2005). Innovation in the UK regions and devolved administration: a review of the literature. Final report for the department of trade and industry and the office of the deputy prime minister. London.
• Hall, B. (2011). Innovation and productivity. Nordic Economic Policy Review, 2.
• Hall, B. H., Mairesse, J., & Mohnen, P. (2010). Measuring the returns to R&D. In: B. H. Hall & N. Rosenberg (Eds.). Handbook of the economics of innovation. Amsterdam and New York: Elsevier.
• Holmes, T. J., & James Schmitz. (2001). A gain from trade from unproductive to productive entrepreneurship. Journal of Monetary Economics, 47. doi: 10.1016/S0304-3932(01)00044-7.
• Keller, W. (2002). Geographic localization and international technology diffusion. American Economic Review, 92(1). doi: 10.1257/000282802760015630.
• Kneller, R. (2005). Frontier technology, absorptive capacity and distance. Oxford Bulletin of Economics and Statisitics, 67(1). doi: 10.1111/j.1468-0084.2005.00107.x.
• Krugman, P. (1998). What's new about the New Economic Geography? Oxford Review of Economic Policy, 14(2). doi: 10.1093/oxrep/14.2.7.
• Lopez-Rodriguez J., & Martinez-Lopez D. (2017). Looking beyond the R&D effects on innovation: the contribution of non-R&D activities to total factor productivity growth in the EU. Structural Change and Economic Dynamics, 40. doi: 10.1016/j.strueco.2016.11.002.
• L'opez-Bazo, E., Requena, F., & Serrano, G. (2006). Complementarity between local knowledge and internationalization in regional technological progress. Journal of Regional Science, 40(5). doi: 10.1111/j.1467-9787.2006.00490.x.
• Marrocu, E., Paci, R., & Usai, S. (2013). Productivity growth in the old and new Europe: the role of agglomeration externalities. Journal of Regional Science, 53(3). doi: 10.1111/jors.12000.
• Martin, P., & Ottaviano, G. I. P. (2001). Growth and agglomeration. International Economic Review, 42(4). doi: 10.1111/1468-2354.00141.
• Martin, R., & Sunley, P. (2006). Path dependence and regional economic evolution. Journal of Economic Geography, 6(4). doi: 10.1093/jeg/lbl012.
• O'Donnell, C. J. (2011). DPIN 3.0. A program for decomposing productivity index numbers. University of Queensland, Australia: Queensland.
• O'Donnell, C. J. (2012). An aggregate quantity framework for measuring and decomposing productivity change. Journal of Productivity Analysis, 38(3).
• Ottaviano, G., & Thisse, J. F. (2004). Agglomeration and economic geography. In: V. Henderson & J. F. Thisse (Eds.). Handbook of regional and urban economics, Volume 4. Cities and geography. North Holland.
• Petrov, A. N. (2011). Beyond spillovers: interrogating innovation and creativity in the peripheries. In: H. Bathelt, M. P. Feldman & D. F. Kogler (Eds). Beyond territory. Dynamic geographies of knowledge creation, diffusion and innovation. London and New York: Rotledge.
• Puškárová, P. (2018). Methodological dichotomy in the studies of knowledge spillovers: CEE region under focus. In: J. Stejskal, P. Hajek & O. Hudec (Eds). Knowledge spillovers in regional innovation systems. Advances in spatial science. Cham: Springer.
• Puškárová, P., & Piribauer, P. (2016). The impact of knowledge spillovers on total factor productivity revisited: new evidence from selected European capital regions. Economic Systems, 40(3). doi: 10.1016/j.ecosys.2015.09.006.
• Redding, S. (2002). Path dependence, endogenous innovation, and growth. International Economic Review, 43(4). doi: 10.1111/1468-2354.t01-1-00054.
• Regional Innovation Scoreboard 2017. Retrieved from https://ec.europa.eu/docsroom/documents/31491 (25.02.2019).
• Rodriguez-Pose, A., & Tselios V. (2009). Education and income inequality in the regions of the European Union. Journal of Regional Science, 49(3). doi: 10.1111/j.1467-9787.2008.00602.x.
• Schatzer, T., Siller, M., & Walde, J. (2019). The impact of model choice on estimates of regional TFP. International Regional Science Review, 42(1). doi: 10.1177/0160017618754311.

Identyfikatory

DOI

10.24136/eq.2019.032