Dynamic process of technology spillover; a transfer function approach

Abstract

This paper analyzes and demonstrates the spillover phenomenon related to technology stock in terms of mathematical model. It uses a transfer function approach focusing on dynamic relationship demonstrating how technology stock responds with respect to the change of various input variables such as their own R&D efforts, spillover from other sectors and the characteristics of this process. In terms of this analysis, it is possible to find useful relationships for calculating the appropriability and specific capacity relating technology flows among parameters. By utilizing the fact that time constant is equivalent to lead time, mathematical formulae with respect to appropriability could be obtained. In addition, by means of sensitivity concept of technology stock, it is possible to compute specific capacity in a broad manner. Based on this model, governing parameters such as appropriability and specific capacity including assimilation capacity are estimated and simulated in terms of the techno-economic data set of the Japanese manufacturing industry. Furthermore, the characteristic of technology stock that slows itself down is clarified using a mathematical formula.