JEL classification

Determinants of innovation in a small open economy: the case of Belgium [29/06/2008]

Using dynamic panel data on 20 Belgian market sectors over 1987-2005, the paper analyses the link between Multifactor Productivity (MFP) growth and three frequently cited determinants: business R&D, labour skills and ICT use. The theoretical framework of the analysis is given by the Aghion-Howitt model which explains the rate of MFP growth by the distance to the world technology frontier.