Trade and Transmission of Technology
AbstractWe present a model of R&D-driven growth which predicts that technology, in the form of product designs and created through R&D investments, is transmitted to other domestic and foreign sectors by being embodied in differentiated intermediate goods. Empirical results are presented employing data from thirteen manufacturing industries in eight OECD countries over the period of 1970 to 1991. We confirm, first, earlier findings that R&D expenditures are positively related to productivity levels, and estimate an elasticity of TFP with respect to own-industry R&D between 7% and 17%. Second, the receiving industry benefits also from other industries' technology investments, an effect which is at least in part due to trade in embodied technology. We find that the benefit derived from foreign R&D in the same industry is in the order of 50%-95% of the productivity effect of own R&D. Third, for domestic interindustry technology flows, the results strongly suggest that trade in goods is not all that matters for technology transmission. We estimate that domestic, outside-industry R&D is one-fifth to one-half as effective in raising" productivity as own-industry R&D for these industries.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6113.
Date of creation: Jul 1997
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Publication status: published as Keller, Wolfgang. "Trade And The Transmission Of Technology," Journal of Economic Growth, 2002, v7(1,Mar), 5-24.
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Find related papers by JEL classification:
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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