Faraway or Nearby? : Domestic and International Spillovers in Patenting and Product Innovation
The diffusion of knowledge plays a central role in endogenous growth theories. Simply put, in these models new knowledge can be generated from preexisting knowledge. In other words, existing knowledge is a pure public good, which can benefit any ec...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/09/26799445/faraway-or-nearby-domestic-international-spillovers-patenting-product-innovation http://hdl.handle.net/10986/25144 |
| Summary: | The diffusion of knowledge plays a
central role in endogenous growth theories. Simply put, in
these models new knowledge can be generated from preexisting
knowledge. In other words, existing knowledge is a pure
public good, which can benefit any economic agent anywhere.
More generally, endogenous growth theories rely on a broad
set of assumptions that have not been tested sufficiently,
especially for developing economies. The scope and nature of
knowledge spillovers is, however, important for policy,
because the presumed positive spillovers can justify
government intervention (if the spillovers are localized) or
laissez faire (if the spillovers are international). This
paper empirically assesses the scope and direction of
knowledge spillovers in national patenting and, separately,
product innovation by firms. The first set of exercises
tests whether the cumulative knowledge specifications of the
knowledge production function can explain international
patterns of patenting or whether own research and
development is necessary to produce patents. The second set
of exercises analyzes whether firm product-quality upgrading
and the introduction of new products depend on product
innovation within industries, within or across countries.
The evidence supports the view that existing stocks of
knowledge, domestic and foreign, enhance national innovation
and entrepreneurship in the form of product innovation. More
specifically, the evidence suggests that within-country and
international knowledge spillovers are positive, but
international spillovers can be negative for firms that are
far from innovative firms in terms of productivity. The
results depend on the concept of “distance” between
countries and firms. |
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