The fund-flow approach. A critical survey

The fund-flow approach to production theory was first proposed by Nicholas Georgescu-Roegen almost half a century ago. Since then, from time to time it has received attention, but, probably because of its analytical complexity and difficulty to deliver sound "operational conclusions", it is now almost abandoned. The approach has been also recently criticized for its instrumental assumption of constant efficiency of funds, by emphasizing its limitations in addressing issues related to fixed capital depreciation. The paper critically surveys Georgescu-Roegen's original model, together with the later developments and modifications. It also discusses the recent criticisms. The conclusion is that, despite its drawbacks, the fund-flow approach has a "competitive advantage" in the actual description of production as a process unfolding in time and entailing a temporal coordination between different elements. In this respect, it seems that most of its fruitful applications have yet to come.Fund-flow model; Georgescu-Roegen; Production theory;Returns to scale; Technical coefficients

Taking Keller seriously: trade and distance in international R&D spillovers

In a much cited paper, Wolfgang Keller (Are international R&D spillovers trade-related? Analyzing spillovers among randomly matched trade partners, European Economic Review, 48, 1469-1481, 1998) claims that international R&D spillovers are global and trade-unrelated. In following works, Keller revisits his position and maintains that spillovers are localized because the tacit nature of knowledge favors the direct interaction among agents. Whether the international R&D spillovers are global and trade-related still remains a debated issue in the empirical literature. By adopting two empirical specifications that nest Keller's models, we i) reject the hypothesis that international R&D spillovers are global and ii) show that these latter depend on both geographical distance and international trade.International R&D spillovers, International technology diusion, Localized knowledge spillovers, Total Factor Productivity

Trade network and international R&D spillovers

Following Coe and Helpman (International R&D Spillovers, EER, 39, 859-887, 1995), the literature on the trade-related channels of international knowledge flows has flourished. Departing from Coe and Helpman's tenets on the proportionality of trade and productivity spillovers and thus relaxing the implicit assumption that the knowledge transferred internationally is physically embodied in the exchanged products, we test whether relatively strong bilateral trade relationships are significantly associated with important international R&D spillovers. Notably, we focus on refined measures of bilateral trade that account for country size, time-invariant pair-specific factors and time-varying country-specific factors. By distinguishing closer and more distant trade partners without weighting their R&D stocks for the bilateral trade flows, we show that trade is indeed an international transmission channel of knowledge even when distance and other pair specific time-invariant factors are taken into account.International R&D spillovers, Total Factor Productivity, International trade network

Organizational capital and firm performance. Empirical evidence for European firms

The paper assesses the impact of Organizational Capital (OC) on firm perfor- mance for a sample of European firms. OC is proxied by capitalizing an income statement item (SGA expenses). A rationale for this methodology is provided. Results are robust and show the strong effect of OC on firm performance.Intangibles, Knowledge-based resources, Organizational capital,R&D capital stock, Translog production function

Innovation Clusters in Technological Systems: A Network Analysis of 15 OECD Countries for the Middle '90s

The paper aims at investigating how innovations cluster in different technological systems (TSs) when their “techno-economic", rather than “territorial" space is considered. Innovation clusters of economic sectors are identified by applying network analysis to the intersectoral R&D flows matrices of 15 OECD countries in the middle '90s. Different clusterization models are first tested in order to detect the way sectors group on the basis of the embodied R&D flows they exchange. Actual clusters are then mapped in the different TSs by looking for intersectoral relationships which can be qualified to constitute “reduced-TSs" (ReTSs). In all the 15 TSs investigated the technoeconomic space appears organized in hierarchies, along which its constitutive sectors group into clusters with different density and composition. Once ReTSs are looked for, the 15 TSs display highly heterogeneous structures, but with some interesting similarity on the basis of which different clusters of TSs can be identified in turn.Innovation clusters; technological systems; R&D expenditure; embodied innovation flows

Taking Keller seriously: trade and distance in international R&D spillovers

In a much cited paper, Wolfgang Keller (Are international R&D spillovers trade-related? Analyzing spillovers among randomly matched trade partners, European Economic Review, 48, 1469-1481, 1998) claims that international R&D spillovers are global and trade-unrelated. In following works, Keller revisits his position and maintains that spillovers are localized because the tacit nature of knowledge favors the direct interaction among agents. Whether the international R&D spillovers are global and trade-related still remains a debated issue in the empirical literature. By adopting two empirical specifications that nest Keller’s models, we i) reject the hypothesis that international R&D spillovers are global and ii) show that these latter depend on both geographical distance and international trade.International R&D spillovers, International technology diffusion,Localized knowledge spillovers, Total Factor Productivity

International R&D spillovers, absorptive capacity and relative backwardness: a panel smooth transition regression model

We investigate how the country’s absorptive capacity and relative backwardness affect the impact of international R&D spillovers on domestic Total Factor Productivity (TFP). To account for nonlinearities, we adopt a Panel Smooth Transition Regression (PSTR) approach, where the country’s elasticity of TFP to foreign R&D stock is allowed to change smoothly across various identified extreme values, and this change is related to observable transition variables: human capital (capturing the country’s absorptive capacity) and relative backwardness. The results suggest that absorptive capacity is positively associated with international R&D spillovers. In addition, and in contrast with previous results, relative backwardness has a negative and significant impact on them.Absorptive capacity, International R&D spillovers, Nonlinear panel, Smooth Transition Regression, Total Factor Productivity