This paper investigates whether technology spills over across national borders and technology regimes. We advocate a modeling strategy where changes in technical efficiency capture technology spillovers as industries absorb and implement the best-practice (frontier) technology. Recently developed dynamic panel-based techniques are used to determine whether efficiency series move together in the long run (cointegrate) and/or move closer together over time (converge). We contribute to the literature by controlling for technological heterogeneity and for cross-sectional dependence in the data. For a panel of manufacturing industries in six EU countries, we find evidence of long-run relationships among industries' efficiency levels in different countries and technology regimes. Furthermore, we find convergence among manufacturing industries, both across countries and across technology regimes.
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Paper provided by Utrecht School of Economics in its series Working Papers with number
08-32.
Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
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