Spillovers of innovation effects

The effects of process and product innovation are analyzed in a multisectoral framework. The effect of an innovation in any particular sector propagates throughout the entire economy. A simple measure for the spillover of innovation effects to the other sectors is developed. As a consequence, an alternative viewpoint is obtained for the interpretation of the elements of the Leontief inverse and the traditional measures for interindustry linkages. An empirical application is given for the European Union in 1991. (C) 2000 Society for Policy Modeling. Published by Elsevier Science Inc.