The presence of knowledge spillovers and shared human capital is at the heart of the Marhall-Arrow- Romer externalities hypothesis. Most of the earlier empirical contributions on knowledge externalities, however, considered data aggregated at a regional level so that conclusions are based on the...

Maximum likelihood estimation of spatial models based on weight matrices typically requires a sizeable computational capacity, even in rel- atively small samples. The unilateral approximation approach to spatial models estimation has been suggested in Besag (1974) as a viable alternat- ive to...