Estimating Feedback Effect in Technical Change: A Frontier Approach
Vincent M. Otto, Timo Kuosmanen, Ekko C. van Ierland
Cross-country comparisons,Data envelopment analysis (DEA),Feedback effect,Malmquist productivity index,Technical change,Two-stage semiparametric estimation
Economy and Society
Gianmarco I.P. Ottaviano
This study examines whether today’s technical change depends on yesterday’s technical change. We propose to investigate this feedback effect by using the technical-change component of the Malmquist productivity index. This approach can overcome some problems in alternative patent-citation approaches. We apply the approach by estimating the feedback effect from production data of 25 OECD countries for 1980 through 1997. Our model yields evidence on a positive feedback effect with delays up till eight years. These findings are in line with patent-citation studies and bring us closer to a measure of the social returns to R&D.