Economic development and the structure of cross-technology interactions

Abstract

Most explanations of economic growth are based on knowledge spillovers, where the development of some technologies facilitates the enhancement of others. Empirical studies show that these spillovers can have a heterogeneous and rather complex structure. But, so far, little attention has been paid to the consequences of different structures of such cross-technology interactions: Is economic development more easily fostered by homogenous or heterogeneous interactions, by uni-or bidirectional spillovers? Using a detailed description of an r&d sector with cross-technology interactions embedded in a simple growth model, we analyse how the structure of spillovers influences growth prospects and growth patterns. We show that some type of interactions (e.g., one-way interactions) cannot induce exponential growth, whereas other structures can. Furthermore, depending on the structure of interactions, all or only some technologies will contribute to growth in the long run. Finally, some spillover structures can lead to complex growth patterns, such as technology transitions, where, over time, different technology clusters are the main engine of growth.

Industry‐Specific Productivity and Spillovers Through Input–Output Linkages: Evidence from Asia‐Pacific Value Chain

“…Since the early studies concerning spillovers in the endogenous growth theory (Arrow, 1962; Grossman and Helpman, 1991), it has been recognized that technological advances diffuse and are transmittable across economies. Technological spillovers have been found to be the main drivers of technological progress and thus long‐term growth (Lucas and Moll, 2014; Acemoglu and Cao, 2015; Bondarev and Krysiak, 2021). A number of early studies on economic growth have discussed various channels for technological spillovers, such as intermediate purchases (Wolff and Nadiri, 1993), patent relevance (Verspagen, 1997), international trade and R&D capital (Coe and Helpman, 1995; Eaton and Kortum, 1996), foreign direct investment (Caves, 1996; Demir and Duan, 2018) and geographical proximity (Keller, 2002).…”