Nonnis, A., Boundfour, A., Kim, K. (2023). Knowledge spillovers and intangible complementarities: Empirical case of European countries. Research Policy, Volume 52, Issue 1.

Although the effects of complementary investments and their spillovers are often mentioned in the literature, there is a lack of in-depth research. This paper aims to fill this gap, taking into account knowledge diffusion and complementarities between different intangible assets, and evaluating their effects on productivity. The paper proposes new measures of knowledge, which consider these complementarities, by using principal component analysis (PCA) to aggregate intangibles, and the Niche overlap index to ease interpretation.

The analysis is conducted on an unbalanced country-industry panel dataset of 13 European countries, constructed from a combination of sources such as INTAN-Invest, WIOD, World Bank and EU-KLEMS. Results confirm the importance of considering complementarities for detecting knowledge spillover effects, especially in the case of domestic spillovers, while foreign spillovers are shown to be less effective, supporting the view of knowledge spillovers as a prevalently localised phenomenon.

Read the paper here.