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Small Business Economics

25-10-2023 | Research article

Revisiting the knowledge spillover paradox: the impact of infrastructure

Authors: Ronja Kirschning, Matthias Mrożewski

Published in: Small Business Economics

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Abstract

Knowledge is regarded as a key driver of entrepreneurial activity and economic performance. Nevertheless, empirical evidence suggests that the extent to which knowledge spills over and translates into entrepreneurial activity differs tremendously across different regions. These inconsistent results expose the knowledge spillover mechanism as a concept that is not well understood. This paper is one of the few studies to propose an explanation for the seemingly inconclusive results that we find in the literature by considering the role of infrastructure in knowledge spillovers. Using a dataset of 67 countries, we examine the impact of different types of physical and digital infrastructure on the knowledge spillover mechanism. Our empirical results reveal that the extent to which knowledge translates into entrepreneurial activity largely depends upon the development of specific types of digital and physical infrastructure. This paper provides valuable insights into the knowledge spillover mechanism by identifying certain factors that influence the extent to which knowledge translates into entrepreneurial activity. Furthermore, it has important policy implications for countries to promote entrepreneurial activity and economic performance by developing certain types of physical and digital infrastructure.

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We use the natural logarithm of expenditures on R&D, expressed as a percent of GDP.

We use the natural logarithm of fixed broadband internet and mobile telephone subscriptions.

Empirical results can be found in Table 4.

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Title: Revisiting the knowledge spillover paradox: the impact of infrastructure
Authors: Ronja Kirschning
Matthias Mrożewski
Publication date: 25-10-2023
Publisher: Springer US
Published in: Small Business Economics
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-023-00833-8

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