On 'Indirect' Trade-Related R&D Spillovers
University of Geneva - Graduate School of Business (HEC-Geneva)
University of Geneva; Centre for Economic Policy Research (CEPR)
World Bank; Institute for the Study of Labor (IZA); University of Chile
CEPR Discussion Paper No. 2871
An influential literature argues that trade promotes knowledge flows and technology transmission between trading partners. This literature focuses on 'direct' R&D spillovers which are related to the levels of R&D produced by the trading partners. In this paper we argue that 'indirect' trade-related R&D spillovers also take place between countries, even if they do not trade with each other. These 'indirect' spillovers are associated with available rather than with produced levels of R&D. Our empirical results suggest that these 'indirect' trade-related spillovers are at least as important as the 'direct' ones, and strengthen the view that trade does matter for the international transmission of R&D. They also suggest that, due to the existence of these 'indirect' effects, bilateral trade patterns are relatively less important as determinants of the level of foreign R&D spillovers acquired through trade.
Number of Pages in PDF File: 32
Keywords: Direct, indirect foreign R&D spillovers
JEL Classification: C23, F01, O30, O47working papers series
Date posted: July 26, 2001
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