REGIONAL GROWTH,INNOVATION, AND LATENT NONLINEAR EFFECTS |
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Authors: | Marcos Sanso‐Navarro María Vera‐Cabello |
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Institution: | 1. Departamento de Análisis Económico, Universidad de Zaragoza, Zaragoza, Spain;2. Centro Universitario de la Defensa de Zaragoza, Academia General Militar, Zaragoza, Spain |
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Abstract: | This paper studies the link between knowledge, innovation, and growth in European regions using nonparametric methods. Our findings suggest that knowledge inputs and the share of innovative firms have a heterogeneous and nonlinear relationship with growth. This evidence has been exploited to examine the consequences of alternative policies using a counterfactual estimation setup, the results of which imply that increasing the formal knowledge base may be optimal in most regions. Less knowledge and innovation intensive regions will also benefit from a higher innovation potential and from a trustworthy and entrepreneurial economic environment. |
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