Productivity Growth, Human Capital and Technology Spillovers: Nonparametric Evidence for EU Regions
| Author | Peter H. Egger,Harald Badinger,Maximilian von Ehrlich |
| Date | 01 August 2019 |
| DOI | http://doi.org/10.1111/obes.12285 |
| Published date | 01 August 2019 |
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©2019 The Department of Economics, University of Oxford and JohnWiley & Sons Ltd.
OXFORD BULLETIN OF ECONOMICSAND STATISTICS, 81, 4 (2019) 0305–9049
doi: 10.1111/obes.12285
Productivity Growth, Human Capital and Technology
Spillovers: Nonparametric Evidence for EU
Regions*
Harald Badinger,†Peter H. Egger‡ and Maximilian von
Ehrlich§
†Vienna University of Business Administration and Economics, Austrian Institute of
Economic Research (WIFO) and CESifo, Althanstrasse 39-45, A-1090 Vienna, Austria
(e-mail: harald.badinger@wu.ac.at)
‡ETH Z¨urich, CEPR, CESifo, Leverhulme Centre for Research on Globalisation and
Economic Policy (GEP) at the University of Nottingham, and Oxford University Centre for
Business Taxation (OUCBT), ETH Z ¨urich, KOF, Weinbergstrasse 35, WEH E6 8092, Z¨urich,
Switzerland (e-mail: egger@kof.ethz.ch)
§Department of Economics, University of Bern and CESifo, Schanzeneckstrasse 1, A211,
3001 Bern, Switzerland (e-mail: maximilian.vonehrlich@vwi.unibe.ch)
Abstract
This paper assesses the strength of productivity spillovers nonparametrically in a data set
of 12 industries and 231 NUTS2 regions in 17 European Union member countries be-
tween 1992 and 2006. It devotes particular attention to measuring the catching up through
spillovers depending on the technology gap of a unit to the industry leader and the lo-
cal human capital endowment. We find evidence of a nonlinear relationship between the
technology gap to the leader as well as human capital and growth in logs. Spillovers are
smallest for units with a medium-high technology gap to the leader, especially for regions
where human capital endowments are low.
I. Introduction
A large body of empirical work in macroeconomics emphasizes the role of total factor pro-
ductivity (TFP) spillovers through knowledge diffusion for catching up and convergence.
Nelson and Phelps (1966) suggested that the extent of knowledge spillovers depends on
two factors, the distance to the technological frontier (the technologygap) and an economic
unit’s knowledge stock or human capital endowment. There is now broad evidence on the
importance of either one of the two for catching up and convergence. Virtually all of this
JEL Classification numbers: C14; N10; N14; O33; O47.
*We thank Jonathan Temple and two anonymous reviewers for numerous comments on earlier versions of the
manuscript. Moreover, the authors gratefully acknowledge comments byWouter Vermeulen and participants at the
annual conference of the International Institute of Public Finance at Dublin, 2015.
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