International R&D Spillovers: A Re-Examination (original) (raw)

International R&D Spillovers: A Re-Examwation

Coe and Helpman (1995) have measured the extent to which technology spills over between industrialized countries through the particular channel of trade flows, This paper reexamines two particular features of their study. First, we suggest that their functional form of how foreign R&D affects domestic productivity via imports is probably incorrect. We provide an alternative model which turns out to be more accurate, both theoretically and empirically. Second, we take into account two new potential channels of technology transfer: inward FDI and technology sourcing, as proxied by outward FDI. The empirical results show that outward FDI flows and imports flows are two simultaneous channels through which technology is internationally diffused. Inward FDI flows are not a significant channel of technology transfer. The hypothesis of technology sourcing associated with MNEs activities abroad is therefore confirmed while the widespread belief that inward FDI is a major channel of technology transfer is rejected.

On `indirect' trade-related R&D spillovers

European Economic Review, 2005

An influential literature argues that trade promotes knowledge flows and technology transmission between trading partners. This literature focuses on 'direct' R&D spillovers which are related to the levels of R&D produced by the trading partners. In this paper we argue that 'indirect' trade-related R&D spillovers also take place between countries, even if they do not trade with each other. These 'indirect' spillovers are associated with available rather than with produced levels of R&D. Our empirical results suggest that these 'indirect' trade-related spillovers are at least as important as the 'direct' ones, and strengthen the view that trade does matter for the international transmission of R&D. They also suggest that, due to the existence of these 'indirect' effects, bilateral trade patterns are relatively less important as determinants of the level of foreign R&D spillovers acquired through trade.

International trade, foreign direct investment, and technology spillovers

2009

ABSTRACT This paper examines how international flows of technological knowledge affect economic performance across industries and firms in different countries. Motivated by the large share of the world's technology investments made by firms that are active across borders, we focus on international trade and multinational enterprise activity as conduits for technological externalities, or spillovers.

Technology transfer through imports

2007

Abstract We study international technology transfer through R&D spillovers in sixteen countries' manufacturing industries since the early 1970s. The analysis shows that the productivity impact of international technology transfer often exceeds that of domestic technological change, more so in high-technology industries. Moreover, technology transfer is found to be strongly varying across country-pairs and tends to decline in geographic distance, pointing to goods trade as the transfer channel.

Does Foreign Direct Investment Transfer Technology Across Borders?

Review of Economics and Statistics, 2001

Previous studies have found that importing goods from R&D-intensive countries raises a country's productivity. In this paper we investigate econometrically whether foreign direct investment (FDI) also transfers technology across borders. The data indicates that FDI t ransfers technology, but only in one direction: a country's productivity is increased if it invests in R&D-intensive foreign countries-particularly in recent years-but not if foreign R&D-intensive countries invest in it. Other findings of the paper are: (1) the ratio of foreign-R&D benefits conveyed by outward FDI to foreign-R&D benefits conveyed by imports is higher for large countries than it is for small ones; (2) failure to account for international R&D spillovers leads to upwardly biased estimates of the output elasticity of the domestic R&D capital stock; and (3) there are much larger transfers of technology from the U.

International trade and R&D spillovers

Journal of International Economics, 96(1), 138-149, 2015

Departing from the usual tenets of proportionality between cross-border trade flows and knowledge spillovers, we investigate whether relatively intense trade relationships are associated with particularly large international R&D spillovers. A nonlinear specification nesting the hypothesis of global and trade-unrelated R&D spillovers is estimated on a sample of 24 advanced countries over 1971-2004. We find evidence that trade patterns positively affect the international transmission of knowledge, in particular when we consider bilateral trade flows that, thanks to the estimation of an auxiliary gravity model, are normalized for the size and the distance of the trading partners. Finally, we discuss the patterns of the bilateral relationships characterized by both relatively intense trade and large R&D spillovers.

On ’Indirect ’ Trade-Related R&D Spillovers∗ Olivier

2016

An influential literature argues that trade promotes knowledge flows and tech-nology transmission between trading partners. This literature focuses on ‘di-rect ’ R&D spillovers which are related to the levels of R&D produced by the trading partners. In this paper we argue that ‘indirect ’ trade-related R&D spillovers also take place between countries, even if they do not trade with each other. These ‘indirect ’ spillovers are associated with available rather than with produced levels of R&D. Our empirical results suggest that these ‘indi-rect ’ trade-related spillovers are at least as important as the ‘direct ’ ones, and strengthen the view that trade does matter for the international transmission of R&D. They also suggest that, due to the existence of these ‘indirect ’ effects, bilateral trade patterns are relatively less important as determinants of the level of foreign R&D spillovers acquired through trade.

An empirical note on international R&D spillovers

2013

Whether international R&D spillovers are global and trade-related is still a debated issue. By adopting two specifications that nest models previously estimated in the literature, we test the hypothesis that international R&D spillovers are global and trade-unrelated for a sample of OECD countries over the period 1971-2004. In particular, via a randomization exercise, we reject the null hypothesis of a “global pool of technology” and show that there are partitions of countries associated with relatively strong/weak knowledge spillovers. Then, we estimate a nonlinear specification that includes simultaneously geographical distance and international trade among the determinants of domestic TFP. We find robust evidence that both factors affect how foreign knowledge impacts on the domestic productivity of each recipient country.

Trade, Foreign Direct Investment, and International Technology Transfer: A Survey

World Bank policy research working paper, 1999

What role does trade play in international technology transfer? Do technologies introduced by multinational firms diffuse to local firms? What kinds of policies have proved successful in encouraging technology absorption from abroad and why? Using these questions as motivation, this article surveys the recent trade literature on international technology transfer, paying particular attention to the role of foreign direct investment. The literature argues that trade necessarily encourages growth only if knowledge spillovers are international in scope. Empirical evidence on the scope of knowledge spillovers (national versus international) is ambiguous. Several recent empirical plant-level studies have questioned earlier studies that argued that foreign direct investment has a positive impact on the productivity of local firms. Yet at the aggregate level, evidence supports the view that foreign direct investment has a positive effect on economic growth in the host country. Economic growth results from accumulation of factors of production or from improvements in technology or both. To encourage the generation of new knowledge, industrial countries have elaborate systems of intellectual property rights (iprs) in place and conduct the majority of the world's research and development (r&d). Technologies resulting from r&d spread throughout the world via a multitude of channels. On a fundamental level, international trade in technology differs from other indirect channels of international technology transfer, such as trade in goods and international movement of factors of production. This article critically surveys the literature that explores the roles of trade and foreign direct investment (fdi) as channels of international technology transfer. With respect to fdi, a distinction is made between wholly owned subsidiaries of multinational firms and international joint ventures. Furthermore, the role of fdi is contrasted with that of arm's-length channels of technology transfer, such as licensing. Although the literature has done a decent job of outlining the various channels through which international technology transfer occurs, not enough is known, both