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How special is the special relationship?: using the impact of R&D spillovers on UK firms as a test of technology sourcing

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Author Info

  • Rachel Griffith
  • Rupert Harrison
  • John Van Reenen

Abstract

How much does US-based R&D benefit other countries and through what mechanisms? We test the "technology sourcing" hypothesis that foreign research labs located on US soil tap into US R&D spillovers and improve home country productivity. Using panels of UK and US firms matched to patent data we show that UK firms who had established a high proportion of US-based inventors by 1990 benefited disproportionately from the growth of the US R&D stock over the next 10 years. We estimate that UK firms’ Total Factor Productivity would have been at least 5% lower in 2000 (about $14bn) in the absence of the US R&D growth in the 1990s. We also find that technology sourcing is more important for countries and industries who have "most to learn". Within the UK, the benefits of technology sourcing were larger in industries whose TFP gap with the US was greater. Between countries, the growth of the UK R&D stock did not appear to have a major benefit for US firms who located R&D labs in the UK. The "special relationship" between the UK and the US appears distinctly asymmetric.

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File URL: http://eprints.lse.ac.uk/711/
File Function: Open access version.
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Bibliographic Info

Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 711.

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Length: 54 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:ehl:lserod:711

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Related research

Keywords: International spillovers; technology sourcing; productivity; patents; R&D. JEL classification codes: O32; O33; F23;

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  1. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June.
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Cited by:
  1. Chiara Criscuolo & Jonathan E. Haskel & Matthew J. Slaughter, 2005. "Global Engagement and the Innovation Activities of Firms," NBER Working Papers 11479, National Bureau of Economic Research, Inc.
  2. Carol Corrado & Paul Lengermann & Larry Slifman, 2009. "The Contribution of Multinational Corporations to U.S. Productivity Growth, 1977-2000," NBER Chapters, in: International Trade in Services and Intangibles in the Era of Globalization, pages 331-360 National Bureau of Economic Research, Inc.

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