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International Transmission of Technology and Trade: The Role of Cross-country Heterogeneity

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  • Joung Yeo Angela No

Abstract

In the framework where the channel of international transmission of technology is trade in intermediate inputs, this paper investigates the role of heterogeneities across countries. In particular, this paper analyzes how cross-country differences in production structure, national innovative capacity, and absorptive capacity affect the scope and magnitude of international R&D spillovers on productivity. The study is based on the industry-level data set that covers eight OECD countries from 1970 to 1995. It finds that accounting for cross-country differences in each of production structure (using country-specific input-output relations) and national innovative capacity (using patents granted per R&D investment) yields significantly different spillover effects than previous studies. This suggests that the effect of international R&D spillovers depends on both production structure and the pattern of international trade. Further, it finds the absorptive capacity of a country is positively related to spillovers.

Suggested Citation

  • Joung Yeo Angela No, 2009. "International Transmission of Technology and Trade: The Role of Cross-country Heterogeneity," International Economic Journal, Taylor & Francis Journals, vol. 23(3), pages 427-446.
    • Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:427-446
    DOI: 10.1080/10168730903119476
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    References listed on IDEAS

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    1. Klenow, Peter J. & Rodriguez-Clare, Andres, 2005. "Externalities and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 11, pages 817-861, Elsevier.
    2. Scott Stern & Michael E. Porter & Jeffrey L. Furman, 2000. "The Determinants of National Innovative Capacity," NBER Working Papers 7876, National Bureau of Economic Research, Inc.
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