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Knowledge Spillovers 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 favour 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 has 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 kilometres. Second, technological knowledge has become much 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.

Suggested Citation

  • Keller, Wolfgang, 2001. "Knowledge Spillovers at the World's Technology Frontier," CEPR Discussion Papers 2815, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2815
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Yasar, Mahmut & Morrison Paul, Catherine J., 2008. "Foreign Technology Transfer and Productivity: Evidence From a Matched Sample," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 105-112, January.
    2. Li, Ben, 2010. "Multinational production and choice of technologies: New evidence on skill-biased technological change from China," Economics Letters, Elsevier, vol. 108(2), pages 181-183, August.
    3. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
    4. Wolfgang Keller & Stephen R. Yeaple, 2009. "Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 821-831, November.
    5. Keller, Wolfgang, 2010. "International Trade, Foreign Direct Investment, and Technology Spillovers," Handbook of the Economics of Innovation, Elsevier.
    6. repec:wsi:ceprxx:v:01:y:2012:i:02:n:s1793969012500094 is not listed on IDEAS
    7. Thomas Doring & Jan Schnellenbach, 2006. "What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 375-395.
    8. Abdulai, Awudu & Diao, Xinshen & Johnson, Michael, 2005. "Achieving regional growth dynamics in African agriculture," DSGD discussion papers 17, International Food Policy Research Institute (IFPRI).
    9. Richard Kneller & Philip Andrew Stevens, 2006. "Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(1), pages 1-21, February.
    10. Juergen Antony, 2005. "Scale Externalities of the G7 Countries," Discussion Paper Series 280, Universitaet Augsburg, Institute for Economics.
    11. Juergen Antony, 2005. "Diffusion of Scale Effects between European Regions," Discussion Paper Series 281, Universitaet Augsburg, Institute for Economics.
    12. Nocco, Antonella, 2005. "The rise and fall of regional inequalities with technological differences and knowledge spillovers," Regional Science and Urban Economics, Elsevier, vol. 35(5), pages 542-569, September.
    13. Richard Kneller, "undated". "Exporters and International Knowledge Transfer: Evidence From UK Firms," Discussion Papers 07/07, University of Nottingham, GEP.
    14. Jim Rose & Wayne Stevens, 2004. "Global Connectedness and Bilateral Economic Linkages - Which Countries?," Treasury Working Paper Series 04/09, New Zealand Treasury.
    15. Keller, Wolfgang & Yeaple, Stephen R, 2003. "Multinational Enterprises, International Trade and Productivity Growth: Firm-Level Evidence from the US," CEPR Discussion Papers 3805, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Agglomeration; Communication; Convergence; Divergence; Economic Geography; FDI; Growth; International Trade; Language Skills; R&D; Technology Diffusion; Total Factor Productivity;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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