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Title: International R&D Spillovers

Author(s): David T Coe and Elhanan Helpman

Publication Date: October 1993

Keyword(s): Economic Growth, International Trade and R&D

Programme Area(s): International Trade and Regional Economics

Abstract: Investment in research and development (R&D) affects a country's total factor productivity. Recently new theories of economic growth have emphasized this link and have also identified a number of channels through which a country's R&D affects total factor productivity of its trade partners. Following these theoretical developments we estimate the effects of a country's R&D capital stock and the R&D capital stocks of its trade partners on the country's total factor productivity. We find large effects of both domestic and foreign R&D capital stocks on total factor productivity. The foreign R&D capital stocks have particularly large effects on the smaller countries in our sample (that consists of 22 countries). Moreover, we find that about one-quarter of the worldwide benefits of investment in R&D in the seven largest economies are appropriated by their trade partners.

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Bibliographic Reference

Coe, D and Helpman, E. 1993. 'International R&D Spillovers'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=840