Endogenous growth and learning -by doing spillovers

This thesis investigates the relationship between learning-by-doing spillovers and productivity growth. We develop an endogenous growth model that allows for differential spillovers across sectors. Using this model, we examine the contribution of national and international spillovers to the productivity growth of a country.;The empirical results show that learning spillovers are important in determining productivity growth. It is found that both domestic and international spillovers depend on the skill intensity of a sector: that is, the higher the skill intensity of a sector, the larger will be the spillovers. In both cases, significant spillovers exist only in high-skill-intensive manufacturing sectors. The above results hold true for a country despite its stage of development or the size of its economy. The empirical results also show that greater openness to international trade leads to a higher dissemination of international knowledge.;We find several other important empirical implications of learning-by-doing spillovers. The first concerns the postulation of learning-by-doing theories that large countries would have a substantial growth potential over small countries. We do not find empirical evidence to support the notion that larger countries tend to grow faster. Second, with regard to international spillovers, we find that the foreign knowledge stock affects the productivity growth of a country only when interacted with a measure of openness. Our results indicate that the contribution of foreign knowledge to productivity growth is higher, the more open a country is to foreign trade. Third, regarding the best channel through which foreign-knowledge is transferred, we find that any one of the bilateral trade measures (imports, exports, or total trade) gives rise to broadly similar results.