Christopher F Baum
(), Hans Lööf
() and Pardis Nabavi
Christopher F Baum: Department of Economics, Boston College, Chestnut Hill, MA and Department of Macroe- conomics, DIW Berlin
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Pardis Nabavi: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Abstract: This paper studies firms' capability to recombine internal and local knowledge. It measures the outcome in terms of total productivity growth.Using Swedish data on commuting time for face-to-face contacts across all 290 municipalities, we employ a time sensitive approach for calculating localized knowledge within a municipality and and its close neighbors. Internal knowledge is captured by register data on firms' innovation intensity. The two sources of knowledge are modeled in a production function setting by discrete composite variables with different combinations of input factors. Applying the model on Swedish firm level panel data, we find strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or the level of R&D investment.
33 pages, First version: December 12, 2017. Revised: April 16, 2018.
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