The Diffusion Of Innovation A Spatial Econometric Approach


Abdelouaheb Hocine Yacine Belarbi


The present paper highlights a critical aspect of endogenous growth theory, centering on the pivotal theme of knowledge production and innovation activity. Drawing inspiration from seminal works by Griliches (1979), Romer and Jones (1990-1995), which laid the foundation for the Knowledge Production Function (KPF) with patent flow as a primary output indicator. The versatility of forms of innovation between tangible and intangible allows its mobility across economic agents, carrying substantial implications at both local and international scales. By estimating the spatial panel data model across a sample of 20 countries affiliated with the OECD organization over a 20-year period from 1995 to 2015. At the outset, our examination identified a beneficial spatial interdependence in the production of innovation among countries. Also, a positive direct impact of innovation stock was observed within a country, both internally and in neighboring nations. Additionally, our analysis unveiled a significant adverse indirect influence of Research and Development (RD) stock on innovation production in adjacent countries.