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Are Knowledge Spillovers International or Intranational in Scope? Microeconometric Evidence from the Japan and the United States

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  • Lee Branstetter

Abstract

In a number of theoretical models, it has been shown that technological externalities can generate multiple equilibria in the global pattern of specialization and trade, with different consequences for the relative welfare of the trading countries. In such models, temporary government policies can have lasting effects by pushing the global economy into a particular equilibrium. However, the prediction of multiple equilibria generally hinges on the assumption that the technological externalities are intranational rather than international in scope. In this paper, I point out important shortcomings in previous attempts to estimate the effects of intranational and international knowledge spillovers. Then, I provide new estimates of the relative impact of intranational and international knowledge spillovers on innovation and productivity at the firm level, using previously unexploited panel data from the U.S. and Japan which provide a rich description of the firms' technological activities and allow for potentially much more accurate measurement of spillover effects. My estimates indicate that knowledge spillovers are primarily intranational in scope, providing empirical confirmation of a crucial assumption in much of the theoretical literature. This finding has important implications for the theoretical literature and the public debate on policy.

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  • Lee Branstetter, 1996. "Are Knowledge Spillovers International or Intranational in Scope? Microeconometric Evidence from the Japan and the United States," NBER Working Papers 5800, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5800
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    Cited by:

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    2. Charbel Macdissi & Syoum Negassi, 2002. "International R&D Spillovers: An Empirical Study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(2), pages 77-91.
    3. Dion, David-Pascal, 2004. "Regional integration and economic development: An empirical approach," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 21, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    4. Junius, Karsten, 1997. "Economies of scale: A survey of the empirical literature," Kiel Working Papers 813, Kiel Institute for the World Economy (IfW Kiel).
    5. Damijan, Jože P. & Rojec, Matija & Majcen, Boris & Knell, Mark, 2013. "Impact of firm heterogeneity on direct and spillover effects of FDI: Micro-evidence from ten transition countries," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 895-922.
    6. Mª Luz García de la Vega & José A. Herce, "undated". "Integration and Growth in the EU. The Role of Trade," Working Papers 2000-20, FEDEA.
    7. Mark Funk, 2001. "Trade and International R&D Spillovers among OECD Countries," Southern Economic Journal, John Wiley & Sons, vol. 67(3), pages 725-736, January.
    8. Alejandro Díaz-Bautista, 2003. "Convergence And Economic Growth Considering Human Capital And R&D Spillovers," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 2(2), pages 127-143, Junio 200.
    9. Peri, Giovanni & Urban, Dieter, 2006. "Catching-up to foreign technology? Evidence on the "Veblen-Gerschenkron" effect of foreign investments," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 72-98, January.
    10. Peggy M. Lee, 2005. "A comparison of ownership structures and innovations of US and Japanese firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 39-50.
    11. Funke, Michael & Niebuhr, Annekatrin, 2000. "Spatial R&D Spillovers and Economic Growth - Evidence from West Germany," Discussion Paper Series 26396, Hamburg Institute of International Economics.
    12. Bottazzi, Laura, 2001. "Globalization and local proximity in innovation: A dynamic process," European Economic Review, Elsevier, vol. 45(4-6), pages 731-741, May.
    13. Shujie Yao & Kailei Wei & Genfu Feng & Lin Song, 2008. "Economic growth in the presence of FDI: the perspective of newly industrializing economies," Applied Economics Letters, Taylor & Francis Journals, vol. 15(11), pages 887-891.
    14. Luigi Bonatti, 2006. "Unbalanced Growth and the Sustainability of the Current Account Deficit," Review of International Economics, Wiley Blackwell, vol. 14(5), pages 773-796, November.
    15. Sang-Yong Tom Lee & Xiao Jia Guo, 2004. "Information and Communications Technology (ICT) and Spillover: A Panel Analysis," Econometric Society 2004 Far Eastern Meetings 722, Econometric Society.
    16. Pilar Beneito, 2001. "R&D productivity and spillovers at the firms level: evidence from Spanish panel data," Investigaciones Economicas, Fundación SEPI, vol. 25(2), pages 289-313, May.
    17. Farhauer, Oliver, 2002. "Folgt aus der Theorie des endogenen Wachstums eine neue Wirtschaftspolitik?," Discussion Papers 2002/3, Technische Universität Berlin, School of Economics and Management.
    18. Rensman, Marieke & Kuper, Gerard H., 1999. "The role of R&D and patent activity in economic growth: some empirical evidence," Research Report 99C03, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    19. Gandal Neil & Kunievsky Nadav & Branstetter Lee, 2021. "Network-Mediated Knowledge Spillovers in ICT/Information Security," Review of Network Economics, De Gruyter, vol. 19(2), pages 85-114, January.
    20. Alejandro Diaz-Bautista, 2005. "Convergence and Economic Growth considering Human Capital and R&D Spillovers Convergencia y Crecimiento Economico en Mexico considerando al Capital Humano y derrames en Investigacion y Desarrollo," Urban/Regional 0506012, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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