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International technology diffusion and economic growth: Explaining the spillover benefits to developing countries

  • Seck, Abdoulaye
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    Technology spillovers offer great opportunities for economic growth to developing countries that do little, if any, R&D activity. This paper explores the extent to which these countries benefit from foreign technology, the diffusion mechanisms involved, and the factors that shape their absorption capabilities. Results based on a non-stationary panel of 55 developing countries indicate that the benefits are quite substantial: a ten-percent increase in foreign R&D stock is translated into more than a two-percent increase in aggregate productivity. Of the diffusion channels considered, imports appear to be more conducive to R&D spillover. In addition, developing countries that enjoy larger benefits tend to exhibit larger stock of human capital, more openness to trade and foreign activities, and stronger institutions. These North–South R&D spillovers, although larger than previously suggested, appear less strong than North–North spillovers, adding to the general literature on economic divergence between developed and developing countries.

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    Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

    Volume (Year): 23 (2012)
    Issue (Month): 4 ()
    Pages: 437-451

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    Handle: RePEc:eee:streco:v:23:y:2012:i:4:p:437-451
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