Ideas Production Function and Growth in Brazil

Abstract

It is proposed the estimation of ideas production functions, and to test the relevance of regional spillovers relying on divergent theoretical propositions. The functions are estimated by methods that consider error term corrections to overcome heterogeneities in the panel data. It was observed that stock of knowledge contributes positively to production of ideas, and the assumption of strong intertemporal spillovers was rejected. The elasticity related to produce knowledge to human capital was significant, positive and less than unity. The assumption of constant or increasing returns to scale was also rejected. The effect of neighborhood knowledge stock on the technological performance was significant and positive in the production function of Brazil. However, there was no convergent result in regional functions