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Trade and the Transmission of Technology

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Author Info
Wolfgang Keller (University of Toronto, University of Wisconsin, and NBER)

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Abstract

I present a model of R&D-driven growth which predicts that technology, in 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. I 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. I 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 what matters for technology transmission. I 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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Publisher Info
Paper provided by EconWPA in its series Development and Comp Systems with number 9707001.

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Length: 25 pages
Date of creation: 03 Jul 1997
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Handle: RePEc:wpa:wuwpdc:9707001

Note: Type of Document - Latex; prepared on IBM-PC; to print on HP or Postscript; pages: 25 ; figures: one; request from author
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Related research
Keywords: Research & Development driven productivity growth; intersectoral and international trade of intermediate inputs; intersectoral technology flows;

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Find related papers by JEL classification:
O3 - Economic Development, Technological Change, and Growth - - Technological Change
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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. Keller, Wolfgang, 1996. "Absorptive capacity: On the creation and acquisition of technology in development," Journal of Development Economics, Elsevier, vol. 49(1), pages 199-227, April. [Downloadable!] (restricted)
  2. Rodrik, Rani, 1995. "Trade and industrial policy reform," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 45, pages 2925-2982 Elsevier. [Downloadable!] (restricted)
  3. Park, Walter G, 1995. "International R&D Spillovers and OECD Economic Growth," Economic Inquiry, Oxford University Press, vol. 33(4), pages 571-91, October.
  4. Zvi Griliches, 1992. "The Search for R&D Spillovers," NBER Working Papers 3768, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander, 1995. "North-South R&D Spillovers," CEPR Discussion Papers 1133, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Ariel Pakes & Mark Schankerman, 1979. "The Rate of Obsolescence Of Knowledge, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Working Papers 0346, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Wolff, Edward N. & Ishaq Nadiri, M., 1993. "Spillover effects, linkage structure, and research and development," Structural Change and Economic Dynamics, Elsevier, vol. 4(2), pages 315-331, December. [Downloadable!] (restricted)
  9. Ariel Pakes & Mark Schankerman, 1984. "The Rate of Obsolescence of Patents, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Chapters, in: R & D, Patents, and Productivity, pages 73-88 National Bureau of Economic Research, Inc. [Downloadable!]
  10. Eaton, Jonathan & Kortum, Samuel, 1996. "Trade in ideas Patenting and productivity in the OECD," Journal of International Economics, Elsevier, vol. 40(3-4), pages 251-278, May. [Downloadable!] (restricted)
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  11. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May. [Downloadable!] (restricted)
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  12. M. Ishaq Nadiri, 1993. "Innovations and Technological Spillovers," NBER Working Papers 4423, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Adam B. Jaffe, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value," NBER Working Papers 1815, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Griliches, Zvi & Lichtenberg, Frank, 1984. "Interindustry Technology Flows and Productivity Growth: A Re-examination," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 324-29, May. [Downloadable!] (restricted)
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  15. Johnson, Daniel & Evenson, Robert E, 1997. "Innovation and Invention in Canada," Economic Systems Research, Taylor and Francis Journals, vol. 9(2), pages 177-92, June.
  16. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring. [Downloadable!] (restricted)
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  17. Nadiri, M.I., 1993. "Innovations and Technological Spillovers," Working Papers 93-31, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  18. Zvi Griliches & Frank R. Lichtenberg, 1984. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?," NBER Chapters, in: R & D, Patents, and Productivity, pages 465-502 National Bureau of Economic Research, Inc. [Downloadable!]
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  19. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  20. Kortum, Samuel & Putnam, Jonathan, 1997. "Assigning Patents to Industries: Tests of the Yale Technology Concordance," Economic Systems Research, Taylor and Francis Journals, vol. 9(2), pages 161-75, June.
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