On 'Indirect' Trade-Related R&D Spillovers

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.

[1]  C. Granger,et al.  Co-integration and error correction: representation, estimation and testing , 1987 .

[2]  Wolfgang Keller,et al.  How Trade Patterns and Technology Flows Affect Productivity Growth , 1997 .

[3]  W. Keller.  The Geography and Channels of Diffusion at the World's Technology Frontier , 2001 .

[4]  David G. Tarr,et al.  International Knowledge Flows and Economic Performance: A Review of the Evidence , 2000 .

[5]  Bruno van Pottelsberghe de la Potterie,et al.  International R&D spillovers: A comment , 1998 .

[6]  Lee G. Branstetter.  Are knowledge spillovers international or intranational in scope? ☆: Microeconometric evidence from the U.S. and Japan , 2001 .

[7]  G. Grossman,et al.  Innovation and growth in the global economy , 1993 .

[8]  Elhanan Helpman,et al.  North-South R&D Spillovers , 1994, SSRN Electronic Journal.

[9]  J. Tybout,et al.  Manufacturing Firms in Developing Countries: How Well Do They Do, and Why? , 1998 .

[10]  A. Hoffmaister,et al.  Are There International R&D Spillovers Among Randomly Matched Trade Partners?: A Response to Keller , 1999, SSRN Electronic Journal.

[11]  Elhanan Helpman,et al.  International RandD Spillovers , 1993 .

[12]  Andrew T. Levin,et al.  Unit root tests in panel data: asymptotic and finite-sample properties , 2002 .

[13]  J. MacKinnon,et al.  Several Tests for Model Specication in the Pres-ence of Alternative Hypotheses , 1981 .

[14]  D. Romer,et al.  Does Trade Cause Growth , 1999 .

[15]  Elhanan Helpman,et al.  International R&D spillovers , 1995 .

[16]  M. Nadiri,et al.  Innovations and Technological Spillovers , 1993 .

[17]  Marko Terviö,et al.  Does Trade Raise Income? Evidence from the Twentieth Century , 2000 .

[18]  Wolfgang Keller,et al.  Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners , 1997 .

[19]  Walter G. Park,et al.  INTERNATIONAL R&D SPILLOVERS AND OECD ECONOMIC GROWTH , 1995 .

[20]  Elhanan Helpman,et al.  R&D Spillovers and Global Growth , 1996, SSRN Electronic Journal.