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The geography and channels of diffusion at the world's technology frontier

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  • Keller, Wolfgang

Abstract

Convergence in per capita income turns on whether technological knowledge spillovers are global or local. Global spillovers favor 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 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 kilometers. Second, technological knowledge has become a lot 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. -- Konvergenz beim Pro-Kopf-Einkommen hängt davon ab, ob technologische Wissensspillover global oder lokal sind. Während globale Spillover Konvergenz begünstigen, kann eine geographisch begrenzte Wissensdiffusion zu regionalen Länderverbünden mit anhaltenden Unterschieden in der Höhe des Pro-Kopf- Einkommens führen. In der vorliegenden Arbeit wird geschätzt, welche Bedeutung geographische Entfernung für Technologiediffusion hat, wie sich diese in der Zeit verändert hat und ob internationaler Handel, ausländische Direktinvestitionen und Kommunikation wichtige Diffusionswege bilden. Die Analyse basiert auf einer Untersuchung der Produktivitätseffekte von FuE-Ausgaben in den sieben größten Industrieländern der Welt zwischen 1970 und 1995. Es ergibt sich, erstens, ein starker Einfluß der Entfernung auf die Technologiediffusion: Der geographische Halbwert, gemessen an der Entfernung, bei der die Technologie sich zur Hälfte verflüchtigt, wird auf nur 1200 Kilometer geschätzt. Zweitens ist technologisches Wissen seit den frühen 70er Jahren deutlich globaler geworden. Drittens werden Unterschiede in der bilateralen Technologiediffusion überwiegend dem Handel zugerechnet, wohingegen ausländische Direktinvestitionen und unterschiedliche Sprachfertigkeiten jeweils ca. 15% beisteuern. Diese drei Übertragungswege machen zusammen fast den gesamten Lokalisierungseffekt aus, der sonst der geographischen Entfernung zugeschrieben würde.

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Bibliographic Info

Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 123.

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Date of creation: 2001
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Handle: RePEc:zbw:hwwadp:26140

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Web page: http://www.econstor.eu/handle/10419/20
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Keywords: Convergence; Divergence; Economic Geography; Total Factor Productivity; Technology Diffusion; International Trade; Foreign Direct Investment;

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References

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  1. Blomstrom, Magnus & Kokko, Ari, 1998. " Multinational Corporations and Spillovers," Journal of Economic Surveys, Wiley Blackwell, vol. 12(3), pages 247-77, July.
  2. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
  3. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," Harvard Institute of Economic Research Working Papers 1719, Harvard - Institute of Economic Research.
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  7. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1995. "Long-Run Implications of Investment-Specific Technological Change," UWO Department of Economics Working Papers 9510, University of Western Ontario, Department of Economics.
  8. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
  9. Griffith, Rachel & Redding, Stephen J & Van Reenen, John, 2000. "Mapping The Two Faces Of R&D: Productivity Growth In A Panel Of OECD Industries," CEPR Discussion Papers 2457, C.E.P.R. Discussion Papers.
  10. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," Harvard Institute of Economic Research Working Papers 1856, Harvard - Institute of Economic Research.
  11. Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc.
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  13. Richard E. Baldwin & Rikard Forslid, 1999. "The Core-Periphery Model and Endogenous Growth: Stabilising and De-Stabilising Integration," NBER Working Papers 6899, National Bureau of Economic Research, Inc.
  14. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-80, September.
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  16. Edmond, Chris, 2001. "Some Panel Cointegration Models of International R&D Spillovers," Journal of Macroeconomics, Elsevier, vol. 23(2), pages 241-260, April.
  17. repec:fth:bosecd:109 is not listed on IDEAS
  18. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
  19. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-70, August.
  20. Jess Gaspar & Edward Glaeser, 1996. "Information Technology and the Future of Cities," NBER Working Papers 5562, National Bureau of Economic Research, Inc.
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