Technological Dynamics in Asymmetric Industries R&D, Spillovers and Absorptive Capacity

Abstract

The analysis we present is concerned with the technological dynamics within economic sectors. A simple model of the technological interaction between best-practice and below best-practice firms is used to identify the mechanism of catching-up and falling-behind. Here the spillover effects and the absorptive capacity of firms are of major importance. We test the model empirically applying OLS and non-linear least squares on firms'data from the German electronics and machinery sectors. We can show that the model's mechanism seems to be relevant for a technologically determined structural change in these sectors although considerable differences are detected.

We are very grateful to the "Stifterverband für die Deutsche Wissenschaft" who made it possible to relate our results on relative firm productivity to German firm specific R&D expenditures. We are especially grateful to Christoph Grenzmann from the "SV-Wissenschaftsstatistik" at Essen who provided the technical assistance for the computations which are presented in section 3. Remaining errors are still our responsibility.

Contact:

Uwe Cantner
Institut für VWL
Universität Augsburg