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Estimating Feedback Effect in Technical Change: A Frontier Approach

Author

Listed:
  • Vincent M. Otto

    (Massachusetts Institute of Technology)

  • Timo Kuosmanen

    (Agrifood Research Finland)

  • Ekko C. van Ierland

    (Environmental Economics and Natural Resources University)

Abstract

This study examines whether today’s technical change depends on yesterday’s technical change. We propose to investigate this feedback effect by using the technical-change component of the Malmquist productivity index. This approach can overcome some problems in alternative patent-citation approaches. We apply the approach by estimating the feedback effect from production data of 25 OECD countries for 1980 through 1997. Our model yields evidence on a positive feedback effect with delays up till eight years. These findings are in line with patent-citation studies and bring us closer to a measure of the social returns to R&D.

Suggested Citation

  • Vincent M. Otto & Timo Kuosmanen & Ekko C. van Ierland, 2006. "Estimating Feedback Effect in Technical Change: A Frontier Approach," Working Papers 2006.27, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2006.27
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    Cited by:

    1. Andreas Löschel & Vincent M. Otto, 2007. "Technology Shocks and Directed Environmental Policy - The Case of CO2 Capture and Storage," Energy and Environmental Modeling 2007 24000034, EcoMod.

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    More about this item

    Keywords

    Cross-country comparisons; Data envelopment analysis (DEA); Feedback effect; Malmquist productivity index; Technical change; Two-stage semiparametric estimation;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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