The importance of the technological spillovers for the returns to space investments, with an empirical application to the Italian high-tech and space sectors (13)

In this paper we present the results of a recent research on R&D investments and productivity in the Italian manufacturing sector. By broadening the traditional perspective, which essentially look at the impact of internal R&D on productivity, we explicitly account for the role of spillovers. These have proven to be very pervasive and important in supporting the growth of labor productivity, especially spillovers originating in high-tech sectors. Since the Italian space industry has a significant role in those sectors, well beyond what its relatively small size would suggest, we take our results as a clear indication of the importance of technological spillovers originating from the space industry for the progress of productivity in the Italian manufacturing. In the first part of the paper we show how the benefits from the spillovers of space investments fit in the general analysis and translate into increases in welfare. At this stage of our research we guess that the benefits from spillovers of space investments are more important than commonly thought. In the second part of the paper we present empirical panel data analysis which, based on Italian manufacturing data at two-digit industry level available from 1980 to 2011, estimates the elasticity of labor productivity to R&D spillover