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A search theoretic model of productivity, science and innovation

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Building on macroeconomic research on technology searches in response to diminishing technological opportunities, we develop an industry-level search theoretic model of productivity, knowledge sources, and innovation. We argue that increasing the use of science in technology development increases the novelty of ideas in the innovation search distribution and thus increases the likelihood of finding productivity improvements. We also propose that this relationship will hold outside the traditional science-based industries (pharmaceuticals, chemicals), and that there is no similar relationship between productivity and non-science patents. Random effect analyses of 32 US manufacturing industries during 1985–1997 support these hypotheses.

Document Type: Research Article

DOI: http://dx.doi.org/10.1111/j.1467-9310.2007.00477.x

Affiliations: 1: School of Business Administration, University of Miami, Jenkins Building, 414 L, 5250 University Drive, Coral Gables, FL 33146, USA., Email: mmakri@miami.edu 2: Whittemore School of Business & Economics, University of New Hampshire, Durham, NH 03824, USA., Email: peter.lane@unh.edu

Publication date: September 1, 2007

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