Industrial and Spatial Spillovers and Productivity Growth: Evidence from Taiwan High-Technology Plant Level Data

The purpose of this paper is to recognize the importance of innovation networks and incorporate various types of knowledge and spatial spillovers and their associated adjustments on productivity growth. We explore the temporal, spatial, and industrial/sectoral spillovers using a dynamic external spillover model that assumes each firm derives an optimal plan such that the expected present value of current and future cost streams is minimized. The goal is to measure and evaluate various types of spillover mechanisms, which allow us both to quantify their cost effects and evaluate the contribution of such inter-dependencies on productive performance.