Knowledge Spillovers and Output per Worker: An Industry-level Analysis for OECD Countries

Bournakis, Ioannis and Christopoulos, Dimitris and Mallick, Sushanta (2015): Knowledge Spillovers and Output per Worker: An Industry-level Analysis for OECD Countries. Published in: Economic Inquiry

Abstract

The paper analyses the impact of knowledge spillovers on output per worker at the industry level using a primal production function approach. The paper make three different contributions in the international spillovers literature: first identifies trade related spillovers under alternative assumptions regarding the information transferred through imports; second, explores the importance of horizontal and vertical FDI in knowledge spillovers and third looks at how institutional factors determine the impact on FDI related spillovers on productivity. The main findings of the paper are: international knowledge spillovers are an important driver of industry output per worker; the economic size of this effect is smaller the more restrictive the assumptions are about the amount of information embodied in imports; the elasticity of output with respect to spillovers is not negligible but it is definitely lower than industry’s own R&D; the effect of spillovers on productivity is mainly driven by high technology industries; gains from FDI spillovers are horizontal, high protection of intellectual property rights and the ease of doing business increase substantially the effectiveness of both horizontal and vertical FDI related spillovers.

• Item Type: MPRA Paper
• Language: English
• Keywords: Productivity; R&D; Knowledge Spillovers; FDI; Intellectual Property Rights
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; F - International Economics > F1 - Trade; F - International Economics > F6 - Economic Impacts of Globalization; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

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