Abstract
AbstractThis paper investigates two channels through which R&D and human capital may affect regional total factor productivity growth in the manufacturing sector. Our model allows for both a direct effect on productivity growth, reflecting own innovation, and an indirect effect, reflecting imitation of frontier technology. The results provide evidence of a positive and significant direct effect of human capital, and a positive and significant indirect effect of R&D. Our estimates also suggest that R&D aids the imitation of technology from geographically close regions, while human capital raises productivity growth in regions that are closer to the frontier than their neighbours.
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