Inventing Together: Exploring the Nature of International Knowledge Spillovers in Latin America

This paper studies the nature, sources and determinants of international patenting activity in Latin American countries (LACs) and examines the extent to which LACs benefit from R&D that is performed in the G-5 countries (France, Germany, Japan, United Kingdom, and United States). By using patents and patent citations at the United States Patent and Trademark Office we trace intrasectoral knowledge flows from G-5 countries to LACs. We study the impact of three channels of spillovers: pure spillovers, patent citations related spillovers, and face-to-face contact spillovers. Our results, based on data for Argentina, Brazil, Chile, Colombia, and Mexico, suggest that international knowledge spillovers from the G-5 countries are a significant determinant of inventive activity over the period 1988-2003. In particular we find that the stock of ideas produced in the US has a strong impact on the international patenting activity of these countries. Moreover controlling for US-driven pure spillover effects, bilateral patent citations and face-to-face relationships between inventors are both important additional mechanisms of knowledge transmission. Some of our results suggest that the latter mechanism is more important than the former.