MODELING NATIONAL INNOVATIVE CAPACITY
We use the national innovative capacity framework to direct our empirical analysis of the drivers
of R&D productivity across the OECD over the past twenty-five years. In effect, we estimate a
production function for economically significant technological innovations, in a manner similar
to the ideas production described by endogenous growth theory (Jones, 1995; Stern and Porter,
1999). We choose a specification in which innovations are produced as a function of the factors
underlying national innovative capacity:
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