International R&D Spillovers: An Empirical Study

The existence of R&D spillovers or externalities i.e. the effects of firms' research activities on others firms activities was theoretically established by Arrow 1962a, but few empirical studies have addressed their effects on firm's economic performance (i.e. productivity growth) and technological performance. In an open economy, firms' economic and technological performance depends on the position of these firms in their national and international technological environment. The main focus of this paper is on identifying the different channels through which international technology spillovers occurs between firms. Our statistical and econometric analysis determine that spillovers drive the productivity growth rates of individual firms. Thus, using a pooling method based on segmentation of bunched (or grouped by industry) individuals rather than those of usual individuals panel models, this empirical study shows that the international spillovers account for a substantial fraction of the variation in firm productivity growth. The estimated coefficients obtained for the classical variables (R&D and Human capital) are comparable to those obtained in the literature.