Stepping on toes in the production of knowledge: A Meta-Regression Analys

Decreasing returns to scale in physical resources in the knowledge production function have been widely considered in the economic growth literature. However, given the heterogeneity of empirical results, it is difficult to access its accurate value. We provide a quantitative meta-analysis of the value of the decreasing returns to physical resources in the knowledge production function (stepping-on-toes effect). This has important policy implications regarding the subsidization of R&D activities and policy measures to facilitate the diffusion of knowledge. We conclude that there is some evidence of publication bias. Moreover, the average size-effect is quite small, around 0.2, which implies a high stepping-on-toes effect. This value tends to be higher when variables linked with international linkages are present, resources allocated to R&D are measured by labour, the knowledge pool is proxied by population, and instrumental variable estimation techniques are employed. On the contrary, the average returns to scale estimate decreases when resources allocated to R&D are measured by population and when only rich countries are included in the sample.