Estimating innovation input–output matrix and innovation linkages in the East Asian region and the USA

Abstract

This paper develops a multi-sector innovation model and derives a theoretical and empirical framework for an innovation version of the input–output matrix. Using industry-level total factor productivity data, we estimate innovation input–output matrices and examine the properties of innovation linkages for two areas: the East Asian region and the integrated region of East Asia and the USA. Our empirical examination favors unbalanced as opposed to balanced growth and identifies core and bottleneck sectors that are the targets of the unbalanced growth strategy. In particular, we found that sectors with high innovation backward and forward linkages are likely to become bottlenecks.