Measuring Technological Spillovers in a Financial Center by using Feder Model

The aim of this paper is to measure technological spillovers between banking activities and
non financial activities and in particular market services related to finance. The econometric
estimations are realized within a dynamic framework due to Feder (1982). For that purpose,
we use data for Luxembourg. Due to its very small-size and to the importance of its
international banking center, this country suits well for analyzing spatially-mediated
externalities. The empirical estimations show significant technological externalities from the
financial services industry to non-financial market services and in particular to Computer Activities and Business Services.