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Knowledge Spillovers at the World's Technology Frontier

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Keller, Wolfgang

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Abstract

Convergence in per capita income turns on whether technological knowledge spillovers are global or local. Global spillovers favour convergence, while a geographically limited scope of knowledge diffusion can lead to regional clusters of countries with persistently different levels of income per capita. This Paper estimates the importance of geographic distance for technology diffusion, how this has changed over time, and whether international trade, foreign direct investment, and communication flows serve as important channels of diffusion. The analysis is based on examining the productivity effects of R&D expenditures in the world's seven major industrialized countries between 1970 and 1995. First, I find that the scope of technology diffusion is severely limited by distance: the geographic half-life of technology, the distance at which half of the technology has disappeared, is estimated to be only 1,200 kilometres. Second, technological knowledge has become much more global from the early 1970s to the 1990s. Third, I estimate that trade patterns account for the majority of all differences in bilateral technology diffusion, whereas foreign direct investment and language skills differences contribute circa 15% each. Lastly, these three channels together account for almost the entire localization effect that would otherwise be attributed to geographic distance.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2815.

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Date of creation: May 2001
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Handle: RePEc:cpr:ceprdp:2815

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Related research
Keywords: Agglomeration; Communication; Convergence; Divergence; Economic Geography; FDI; Growth; International Trade; Language Skills; R&D; Technology Diffusion; Total Factor Productivity;

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Find related papers by JEL classification:
E00 - Macroeconomics and Monetary Economics - - General - - - General
F10 - International Economics - - Trade - - - General
F20 - International Economics - - International Factor Movements and International Business - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Oded Galor & Quamrul Ashraf, 2008. "Human Genetic Diversity and Comparative Economic Development," Working Papers 2008-3, Brown University, Department of Economics. [Downloadable!]
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  2. Wolfgang Keller & Stephen R. Yeaple, 2003. "Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States," NBER Working Papers 9504, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Juergen Antony, 2005. "Scale Externalities of the G7 Countries," Discussion Paper Series 280, Universitaet Augsburg, Institute for Economics. [Downloadable!]
  4. Juergen Antony, 2005. "Diffusion of Scale Effects between European Regions," Discussion Paper Series 281, Universitaet Augsburg, Institute for Economics. [Downloadable!]
  5. Mahmut Yasar & Catherine J. Morrison Paul, 2005. "Foreign Technology Transfer and Productivity: Evidence from a Matched Sample," Emory Economics 0514, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  6. Arvind Virmani, 2005. "Policy regimes, growth and poverty in India : Lessons of government failure and entrepreneurial success," Indian Council for Research on International Economic Relations, New Delhi Working Papers 170, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  7. Jim Rose & Wayne Stevens, 2004. "Global Connectedness and Bilateral Economic Linkages - Which Countries?," Treasury Working Paper Series 04/09, New Zealand Treasury. [Downloadable!]
  8. Abdulai, Awudu & Diao, Xinshen & Johnson, Michael, 2005. "Achieving regional growth dynamics in African agriculture," DSGD discussion papers 17, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Keller, Wolfgang & Yeaple, Stephen R, 2003. "Multinational Enterprises, International Trade and Productivity Growth: Firm-Level Evidence from the US," CEPR Discussion Papers 3805, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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