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This study examines embodied technology flows through intermediate good transactions between industries in various economies and focuses on the ambiguity about their link to innovation. The model consists of two equations measuring labor productivity and knowledge production, and knowledge production is measured as the explanatory variable of productivity. We compare direct effect of embodied research transfer on labor productivity through intermediate good transactions between industries and its indirect effect via knowledge creation. We use input-output tables as a proximity mechanism for research capital and utilize production function approach. Simultaneous equations results support the system we introduce, indicating that both channels of embodied technology spillovers are significant. We observe that labor productivity soars with direct and indirect utilization of technology transfer via knowledge production.

In this study, we examine the association between firms’ innovation process and their product quality improvement and new product introduction strategies. Our focus is on the distinction between firms’ product quality improvement and variety extension objectives. We use data from Turkish Statistical Institute (TURKSTAT) Innovation Survey between the years 2014 and 2016. According to the descriptive results, number of firms report that product quality as very important is greater than the firms report that product variety. Logit estimations results show that majority of the product variety objective and technology level indicators are significant and positively related with probability of product innovation. There is also a positive relationship between probability of product innovation and patent applications for small and medium sized firms. Moreover, probability of innovation is positively related with variety objective whereas quality objective indicators are insignificant.

In growth literature the part and the variations of the growth rates unexplained by the changes in the amount of labor and capital, named as Solow Residual, has been continuing to be one of the main concerns. Technological advances and improvements in human capital have been the main candidates in investigating the sources of the unexplained part of the growth phenomenon. However the channels through which technology is transferred among countries still need more investigation. Most part of the literature is focused on the Total Factor Productivity (TFP), the main determinants of which are considered to be the research and development (R & D) and human capital. More recently spillover effects as the way to transfer the technology through the import of capital and Foreign Direct Investment (FDI) have become the central theme. Spillover effects through capital goods imports and domestic R&D capital stock on labor productivity are empirically investigated in this study for 23 countries between 2002 and 2011. Results of panel data analysis indicated that technology transfer is significant and positive for a large and heterogeneous sample. However, capital goods imports do not cause a knowledge transfer from G7 economies to countries with relatively and significantly lower level of productivity. The paper is expected to contribute the literature by using labor productivity instead of total factor productivity when the effects of externalities are investigated in samples with different set of countries. Keywords