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Technological Leadership and Sectoral Employment Growth: A Spatial Econometric Analysis for U.S. Counties

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  • Pede, Valerien O.
  • Florax, Raymond J.G.M.
  • Groot, Henri L.F. de

Abstract

This paper investigates the determinants of the technological catch up process and examines to what extent geographical and/or technological proximity to the technology leader impact regional employment growth. The employment growth impacts of technological and geographical proximity to the technology leader are examined at a reasonably low level of spatial aggregation, with sufficient attention to sectoral differences and the role of space. The theoretical framework builds on Glaeser et al. (1992), in which employment growth depends on technological progress. Technological progress is endogenously determined and depends on agglomeration economies, specifically specialization, competition and diversity. We extended the Glaeser et al. (1992) theoretical framework by first considering that technological progress also depends on the characteristics of the agglomeration economies in proximate regions. Next, we considered that technological progress depends on a hierarchical process of catch-up to the technology leader, following previous work by Benhabib and Spiegel (1994). The methodology is applied to data of U.S. counties in the lower 48 states, and we consider two-digit industries following the NAICS classification. Results indicate that human capital plays a crucial role in promoting sectoral employment growth. The effect of technological distance varies, depending on which sector is considered. Technological distance to the leader shows a positive and significant effect on employment growth in the sectors Construction & Manufacturing, Information & Utilities, and Services. No effect of technological distance was noticed for Finance & Management, Transportation & Trade, and Natural Resources. The effect of geographical distance to the technology leader on employment growth also varies across sectors. A negative effect is observed for Construction & Manufacturing and Finance & Management. The effect of geographical distance is positive for Natural Resources and Transportation & Trade. No significant effect of geographical distance was observed for Information and Utilities and Services.

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  • Pede, Valerien O. & Florax, Raymond J.G.M. & Groot, Henri L.F. de, 2009. "Technological Leadership and Sectoral Employment Growth: A Spatial Econometric Analysis for U.S. Counties," Conference papers 331882, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331882
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    More about this item

    Keywords

    Research and Development/Tech Change/Emerging Technologies; Labor and Human Capital;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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