Joaquin Garcia-Tapial (p), Manuel Alejandro Cardenete

Although traditionally entrepreneurship has been considered as one of the engines of economic activity, it has not been until recent years that public authorities have made a planned and organized effort to support the entrepreneurial initiative. However, even though many millions of euros are invested annually in this support, the effectiveness of such investment is rarely measured in terms of the impact of entrepreneurial activity on the economy. For this reason, in this paper we analyze the effect of this activity (entrepreneurship) on a regional economy and its impact on it. To do so, we develop a Computable General Equilibrium (CGE) model for the Andalusian economy for 2015, within a top-down approach. The model is based in the Andalusian Social Accounting Matrix (SAM) updated for the year 2015. A SAM is a statistical-accounting instrument that collects all the information of an economic system and, in addition, closes the circular flow of incomes, considering direct, indirect and induced effects. This gives an overview of the implications of the economic flows on the different sectors of activity and at the same time details and completes them. The SAM for Andalusia 2015 has a disaggregation level of 35 economic activities (27 productive sectors plus 8 endogenous accounts that include items such as capital, consumption, labor, investment, taxes, public sector and foreign trade sector). In order to obtain the impact vector for the entrepreneurial activity, necessary to make the estimates for each one of the activity sector, the statistical official information available about business creation in Andalusia has been used. The results will show the effects on Gross Domestic Product, Productive Output and Employment Creation and its distribution by sectors of activity.

Frank Crowley (p), Declan Jordan

A key concept in the economics of innovation is the ‘public good’ nature of knowledge. This generates a tension between incentivizing knowledge production by allowing knowledge creators appropriate the economic benefits and encouraging its diffusion to enhance the social return to knowledge creation. This paper addresses this tension by exploring the effect of greater local entrepreneurship on firms’ research and development activity. Where firms operate in localities that are characterized by greater entrepreneurship, measured by the rate of start-up businesses, there may be lower incentives to engage in research and development. This would result from a higher risk that knowledge spillovers to local start-ups and/or that employees may exploit new knowledge in spin-out firms. It has also been suggested in the literature that greater local entrepreneurial activity may lower profits for incumbent firms, through greater competition and/or the leakage of commercially valuable new knowledge. Using firm-level data from the 2013 Business Environment and Enterprise Performance Survey (BEEPS) for Sweden and county-level data on new start-ups the paper estimates the effect on R&D activity and profitability of local rates of business start-ups.

Sofía Jiménez (p), Rosa Duarte, Julio Sánchez

There is certain consensus in economic literature on the factors that have influenced historical differences in growth patterns observed between developed and developing countries. However, it is less clear how structural elements have marked growth differences in developed economies in recent decades and how these different patterns have conditioned their economic outcomes in the context of the global economic crisis.
R&D has been traditionally studied as a key factor explaining economic growth in developed economies. In fact, significant bulk of literature has provided evidence on this relationship (Griffith (2004) among others). Despite that, recent economic literature has also focused on the role that indirect and imported R&D expenditure (imported R&D) and R&D spillover effects (Vitucci et al (2011) or Seck (2011)) have played boosting economic growth. This indirect influence becomes more evident in a context of increasing globalization and production fragmentation scheme.
In this context, our paper has two main objectives; to study how globalization has changed the world map of R&D flows and their role in economic growth, and to approximate to the temporal gap existing from the R&D investment to the effects on economic growth. Regarding the first objective, we propose a methodology to modify the traditional R&D embodied in demand. The change is mainly based on the concept of country-specific absorptive capabilities (Verspagen, 2016). In order to capture these differences we propose to use a weighted based index depending on the specialization structure.
On the basis of this measure, we formulate an econometric two -equations model to address two important issues: First, how globalization has changed R&D role on economic growth, with an increasing importance of external flows over direct R&D investment itself. Second, our results suggest that immediate R&D investment barely affects labour productivity as most literature tends to assume. In fact we find that there is at least a three years gap depending on the period considered.

John Moffat (p)

This paper investigates the extent of within-enterprise, cross-regional linkages in Great Britain and their implications for regional productivity differences. A particular focus is on linkages between London and the rest of Great Britain. The dataset used for the analysis is the Office for National Statistics' Annual Business Survey, which provides the necessary information on factor inputs and output to calculate estimates of productivity, as well as information on enterprise structure and plant location.
Descriptive analysis shows that, in 2012, around 15% of plants in Great Britain belonged to enterprises operating in more than one region. However, the proportion in Scotland, Wales, the North East of England and Yorkshire/Humberside was substantially higher. Of plants that belonged to multi-regional enterprises, the proportion that were 'London-linked' (i.e. they belonged to an enterprise that also owned plants in London) ranged from 66% in the East Midlands to 78% in the South East of England.
Plants located in London had, on average, around 20% higher total factor productivity (TFP) and almost twice the level of labour productivity of plants located in the rest of Great Britain. However, throughout Great Britain, ‘London-linked’ plants (outside of London) had lower average TFP and labour productivity than other plants in their region. The picture changes somewhat when considering ‘London-dominated’ enterprises (defined as enterprises where at least 50% of employment is in London). Within such enterprises, productivity levels were again lower outside of London. However, plants outside of London belonging to 'London-dominated' enterprises had, on average, higher TFP and labour productivity than other plants in their region. This suggests that the productivity benefits of belonging to an enterprise that operates in London are only realised if the enterprise's presence in London is substantial.