I formulate and estimate a model of externalities within countries and technological interdependence across countries. I find that external returns to scale to physical capital within countries are 8 percent; that a 10 percent increase of total factor productivity of a country's neighbors raises...

The operations management theory emphasizes the management of incremental innovations as one of the cornerstones for continuous improvement of a firm’s operational efficiency. Also in Slovenia, the companies follow the foreign practices in this field as well as developing their own solutions....