The effects of technological opportunity, market demand and RD with respect to productivity growth, it is not possible to distinguish demand and technological opportunity effects, but spillovers are important.

The existence of geographically mediated "spillovers" from university research to commercial innovation is explored using state-level time-series data on corporate patents, corporate R&D, and university research. A significant effect of university research on corporate patents is found, particularly in the areas of drugs and medical technology, and electronics, optics, and nuclear technology. In addition, university research appears to have an indirect effect on local innovation by inducing industrial R&D spending.

This survey assesses evidence on the linkage between environmental regulation and competitiveness, and finds little support for the conventional wisdom that environmental regulations have large adverse effects on competitiveness. Studies examining the effects of environmental regulations on net exports, overall trade flows, and plant-location decisions have produced estimates that are small, statistically insignificant, or not robust. We also find no systematic evidence supporting the revisionist hypothesis that environmental regulations stimulate innovation and improved competitiveness. Overall, the evidence suggests that the truth regarding the relationship between environmental protection and international competitiveness lies in between the extremes of the current debate.

The problem of global climate change presents overwhelming factual, analytical, and normative challenges. Nordhaus surveys this terrain bravely and mostly successfully. He explains the scientific/economic consensus that the planet is warming, that people are responsible, that the consequences are bad, and that immediate action is benefit/ cost justified. He also discusses the efficient policy response, and the challenges of achieving coordinated global action. His approach is mostly that of standard neoclassical economics, and some of the limitations of that paradigm in this context are not addressed. But overall, The Climate Casino provides an excellent self-contained introduction to the subject.

In a 1991 essay in Scientific American, Michael Porter suggested that environmental regulation may have a positive effect on the performance of domestic firms relative to their foreign competitors by stimulating domestic innovation. We examine the stylized facts regarding environmental expenditures and innovation in a panel of manufacturing industries. We find that lagged environmental compliance expenditures have a significant positive effect on R&D expenditures when we control for unobserved industry-specific effects. We find little evidence, however, that industries' inventive output (as measured by successful patent applications) is related to compliance costs.

Knowledge Spillovers and Patent Citations: Evidence from a Survey of Inventors by Adam B. Jaffe, Manuel Trajtenberg and Michael S. Fogarty. Published in volume 90, issue 2, pages 215-218 of American Economic Review, May 2000

We explore the role of interfirm alliances as a mechanism for sharing technological knowledge. We argue that knowledge flows between alliance partners will be greater than flows between pairs of nonallied firms, and less than flows between units within single firms. Using patent citations as a proxy for knowledge flows, we find results that are consistent with these expectations. We then explore how firm characteristics affect knowledge flows within alliances and find positive effects due to technological, geographic, and business similarities between partners. We use alliance data from MERIT, patent data from the USPTO, and firm data from Compustat.