Publication

The factors that shape a country’s ability to benefit from international R&D spillovers

Published: 3 October 2023

ERC Insight paper

Associated Themes

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  Innovation
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  Internationalisation

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This paper reviews the literature on international R&D spillovers with the aim of pinpointing what factors shape a country’s ability to benefit from such spillovers. After defining what spillovers mean and how they occur, two strands of literature are surveyed. The first one measures international spillover as a weighted sum of foreign R&D stocks with weights proportional to transmission channels or proximity measures between senders and receivers and estimates the return of that variable econometrically. In general spillovers were found to be positive, both at the country and industry level, but asymmetric. The second stream of studies concentrates on the transmission channels – imports, exports, foreign direct investment, foreign patenting, patent citations and collaboration – and analyses in more detail how and why they produce spillovers, and under what circumstances they do not. The paper ends by summarizing from the evidence reported in the literature which factors are conducive to benefit from international R&D spillovers. Building up absorptive capacity by means of education and own R&D investment and the removal of barriers to technology adoption are key factors for absorbing the benefit from foreign R&D.

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