International R&D spillovers, human capital and productivity in OECD economies: An empirical investigation

Abstract This paper extends Coe and Helpman's (International R&D spillovers, European Economic Review, 39, 859–887, 1995) study of international R&D spillovers amongst OECD countries by including a general human capital variable which accounts for innovation outside the R&D sector and other aspects of human capital not captured by formal R&D. This results in somewhat smaller coefficient estimates for domestic R&D capital and international R&D spillovers, but they remain highly statistically significant. General human capital is found to affect TFP directly as a factor of production, and as a vehicle for international knowledge transfer associated with productivity catch-up amongst OECD countries. It seems to play a distinct role from R&D in the economic growth processes of these economies.