Do sectoral externalities affect firm productivity regardless of technology level? Evidence from Spain

Abstract

The aim of this study is to assess the impact that R&D expenditure and intraand inter-industry externalities have on Spanish firm’s productivity. Certainly a large body of literature has analysed the relationship between innovation and productivity, however there has been little discussion about the importance of sectoral externalities, especially with the focus on Spain. The database used is the Technological Innovation Panel (PITEC), which includes 7,507 firms for the year 2010 and has been little used in this type of study. The results confirm that R&D expenditures have a positive impact on productivity, mainly in low-tech and small and medium-sized firms. Intra-industry externalities also have a positive and significant effect especially in low-tech firms, while inter-industry externalities are relevant for high-tech firms. Finally, large firms are those that benefit from both intraand inter-externalities.