Although the process of innovation is a crucial aspect of economic growth, there is less clarity about the measurement of economically useful ideas. Determining the extent to which different types of institutions contribute to the creation of new knowledge is essential for a deeper understanding...

In this paper it is tested which of the various alternative approaches for constructing knowledge spillover pools suggested in existing literature measures the extent to which a firm can costlessly receive external knowlegde best. Since knowledge spillovers are unmeasurable, a 'goodness of fit'...