Template-type: ReDIF-Paper 1.0
Author-Name: Goedhuys, Micheline
Author-Email: goedhuys@merit.unu.edu
Author-Workplace-Name: UNU-MERIT 
Author-Name: Srholec, Martin 
Author-Email: martin.srholec@tik.uio.no
Author-Workplace-Name: TIK Centre, University of Oslo, and CERGE-EI, Prague
Title: Understanding multilevel interactions in economic development
Abstract: National framework conditions mediate the effect of technological 
	 capabilities of firms on their productivity. Although this has been 
	 recognized in the literature for a long time, a quantitative test that 
	 explicitly considers this hypothesis has been lacking. Using a World 
	 Bank datasets of about 19,000 firms in 42 countries, most of which are 
	 developing, we estimate a multilevel production function with effects of 
	 firm's technological capabilities nested in the national framework 
	 conditions. Our results confirm that various facets of firm's 
	 technological capabilities and national economic, technological and 
	 institutional conditions influence total factor productivity of firms. 
	 Furthermore, we find that the effects of the national conditions and 
	 firm's technological capabilities are closely intertwined with each 
	 other. Adherence to international standards, formal training of workers 
	 and access to technology through foreign ownership make more difference 
	 for productivity of firms in less developed countries, while R&D 
	 capabilities on the contrary boost significantly more performance of 
	 firms in countries at the technological frontier. Different features of 
	 the national framework are shown to be responsible for this.
Classification-JEL: C39, D24, O12, O14, O31, O43 
Keywords: Productivity, innovation, technological capability, institutions,
	 multilevel modeling
Series: UNU-MERIT Working Papers
Creation-Date: 2010
Number: 003
File-URL: http://www.merit.unu.edu/publications/wppdf/2010/wp2010-003.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2010003