DP1133 North-South R&D Spillovers

Author(s): David T Coe, Elhanan Helpman, Alexander Hoffmaister
Publication Date: February 1995
Keyword(s): Productivity, R&D, Trade
JEL(s): O31, O40
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1133

We examine the extent to which developing countries that do little, if any, research and development themselves benefit from R&D that is performed in the industrial countries. By trading with an industrial country that has large `stocks of knowledge' from its cumulative R&D activities, a developing country can boost its productivity by importing a larger variety of intermediate products and capital equipment embodying foreign knowledge, and by acquiring useful information that would otherwise be costly to obtain. Our empirical results, which are based on observations over the 1971-90 period for 77 developing countries, suggest that R&D spillovers from the industrial countries in the North to the developing countries in the South are substantial.