Localized Technological Knowledge:Pecuniary Knowledge ExternalitiesAnd Appropriability

Recent advances in the economics of knowledge highlight the key role ofpecuniary knowledge externalities in explaining the system dynamics oftotal factor productivity growth. When non-exhaustible technologicalknowledge is an input both in the production of new goods and of furtherknowledge, and the acquisition of external knowledge, as a nondisposableinput in the production of new knowledge, is not free,pecuniary externalities, as opposed to technological externalities, providean important clue to understanding the key role of knowledge governancemechanisms in assessing the rate of growth of total factor productivityand economic systems at large. The negative effects upon appropriabilitylimit the advantages of agglomeration...