Import and FDI as channels of international TFP spillovers
DOI:
https://doi.org/10.24136/eq.2018.003Keywords:
technology transfer, growth, trade, foreign investment, TFPAbstract
Research background: In existing studies two main channels of international technology spillovers are extensively discussed ? trade and FDI. Nevertheless empirical studies give mixed results regards the nature and extent of trade and FDI spillovers.
Purpose of the article: The aim of the article is to study import and foreign direct investments (FDI) as channels of international TFP spillovers.
Methods: We employ dynamic spatial autoregression (SAR) methods. Our panel comprises data for 41 developed and upper mid-developed countries over the period 1995?2014.
Findings & Value added: Our preliminary results show that (1) the trade and investment channels are both important for technology transfer, (2) the degree of their significance depends on the absorptive capacity such as good quality of the institutions.
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References
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Aghion, P., & Howitt, P. (2006). Appropriate growth policies: a unifying framework. Journal of the European Economic Association, 4(2?3). doi: 10.1162/jeea.2006.4.2-3.269.
Ali, M., Cantner, U., & Roy I. (2016). Knowledge spillovers through FDI and trade: the moderating role of quality-adjusted human capital. Journal of Evolutionary Economics, 26(4). doi:10.1007/s00191-016-0462-8.
Amann, E., & Virmani, S. (2014). Foreign direct investment and reverse technology spillovers: the effect on total factor productivity. OECD Journal: Economic Studies, 2014(1). doi: 10.1787/eco_studies-2014-5jxx56vcxn0n.
Anselin, L., Gallo, J. L., & Jayet, H. (2008). Spatial panel econometrics. In L. Mátyás & P. Sevestre (Eds.). The econometrics of panel data. Berlin: Springer-Verlag Berlin Heidelberg. doi: 10.1007/978-3-540-75892-1_19.
Arrelano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58(2). doi:10.2307/2297968.
Arrow, K. J. (1962). The economic implications of learning by doing. Review of Economic Studies, 29(3). doi: 10.2307/2295952.
Bae, Ch. (2016). R&D spillovers with endogenous absorptive capacity: lessons for developing countries. East Asian Economic Review, 20(2). doi: 10.2139/ssrn.2804910.
Balcerzak, A., & Pietrzak, M. (2016). Quality of institutions and total factor productivity in the European Union. Statistics in Transition new series, 17(3). doi: 10.21307/stattrans-2016-034.
Balta, N., & Mohl, P. (2013). The drivers of total factor productivity in catching-up economies. Quarterly Report on the Euro Area, 13(1).
Baltagi, B. (2013). Econometric analysis of panel data. Chichester: John Willey & Sons Ltd.
Becker, G. S., Murphy K. M., & Tamura, R. (1990). Human capital, fertility and economic growth. Journal of Political Economy, 98(5). doi: 10.1086/261723.
Belotti, F., Hughes, G., & Piano Mortari, A. (2016). Spatial panel data models using Stata. CEIS Tor Vergata Research Paper Series, 14(5).
Blomstro?m, M., & Kokko, A. (2011). Foreign direct investment and spillovers of technology. International Journal of Technology Management, 22(5-6). doi: 10.1504/IJTM.2001.002972.
Coe, D. T., Helpman, E., & Hoffmaister, A. W. (1997). North-south R&D spillovers. Economic Journal, 107(440). doi: 10.1111/1468-0297.00146.
Coe, D. T., & Helpman E. (1995). International R&D spillovers. European Economic Review, 39(5). doi: 10.1016/0014-2921(94)00100-E.
Danquah, M., Moral-Benito, E., & Ouattara, B. (2014). TFP growth and its determinants: a model averaging approach. Empirical Economics, 47(1). doi: 10.1007/s00181-013-0737-y.
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Eaton, J. & Kortum, S. (1996). Trade in ideas. Patenting and productivity in the OECD. Journal of International Economics, 40(3?4). doi: 10.1016/0022-1996(95)01407-1.
Elhorst, J. P. (2010). Dynamic panels with endogenous interaction effects when T is small. Regional Science and Urban Economics, 40(5). doi: 10.1016/j.regsciurbeco.2010.03.003.
Elhorst, J. P. (2017). Spatial panel data analysis. In S. Shekhar, H. Xiong & X. Zhou (Eds.) Encyclopedia of GIS. Cham: Springer International Publishing.
Fawaz, F., & Moghadam, M. (2013). Spatial dependence of technology spillovers among trading partners. Global Economy Journal, 13(1). doi: 10.1515/gej-2012-0031.
Feenstra, R. C., Inklaar R., & Timmer M. P. (2015). The next generation of the Penn World Table. American Economic Review, 105(10). doi: 10.1257/aer.20130954.
Fracasso, A., & Vittucci Marzetti, G. (2013). An empirical note on international R&D spillovers. Empirical Economics, 45(1). doi: 10.1007/s00181-012-0614-0.
Freire-Seren, M. J. (2001). R&D-expenditure in an endogenous growth model. Journal of Economics, 74(1).
Furková, A., & Chocholatá, M. (2017). Interregional R&D spillovers and regional convergence: a spatial econometric evidence from the EU regions. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(1). doi: 10.24136/eq.v12i1.1.
Griffith, R., Redding, S., & Van Reenen, J. (2004). Mapping the two faces of R&D: productivity growth in a panel of OECD industries. Review of Economics and Statistics, 86(4).
Grossman, G. M., & Helpman, E. (1991). Trade, knowledge spillovers and growth. European Economic Review, 35(2-3). doi: 10.1016/0014-2921(91)90153-A.
Guellec, D., & van Pottelsberghe de la Potterie, B. (2001). R&D and productivity growth: panel data analysis of 16 OECD countries. OECD Economic Studies, 2001(2). doi: 10.1787/eco_studies-v2001-art12-en.
Hsiao, C., Pesaran, M.H., & Tahmiscioglu, A.K. (2002). Maximum likelihood estimation of fixed effects dynamic panel data models covering short time periods. Journal of Econometrics, 109(1). doi: 10.1016/S0304-4076(01)00143-9.
Isaksson, A. (2007). Determinants of total factor productivity: a literature review. Staff Working Paper United Nations Industrial Development Organization, 02.
Islam, N. (2008). Determinants of productivity across countries: an exploratory analysis. Journal of Developing Areas, 42(1).
Jinji, N., Zhang, X., & Haruna, S. (2015). Trade patterns and international technology spillovers: evidence from patent citations. Review of World Economics, 151(4). doi: 10.1007/s10290-015-0223-z.
Kaldor, N. (1957). A model of economic growth. Economic Journal, 67(268). doi: 10.2307/2227704.
King, R. G., & Rebelo, S. (1990). Public policy and economic growth: developing neoclassical implications. Journal of Political Economy, 98(5). doi: 10.1086/261727.
Krammer, S. M. S. (2010). International R&D spillovers in emerging markets: The impact of trade and foreign direct investment. Journal of International Trade and Economic Development, 19(4). doi: 10.1080/09638190902792464.
Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1). doi: 10.1016/0304-3932(88)90168-7.
Madsen, J. B. (2007). Technology spillover through trade and TFP convergence: 135 years of evidence for the OECD countries. Journal of International Economics, 72(2). doi: 10.1016/j.jinteco.2006.12.001.
Madsen, J. B. (2008). Economic growth, TFP convergence and the world export of ideas: a century of evidence. Scandinavian Journal of Economics, 110(1). doi: 10.1111/j.1467-9442.2008.00530.x.
Mankiw, N., Romer D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2). doi: 10.2307/2118477.
McMorrow, K., Röger, W., & Turrini, A. (2010). Determinants of TFP growth: a close look at industries driving the EU?US TFP gap. Structural Change and Economic Dynamics, 21(3).
Nicoletti, G., & Scarpetta, S. (2003). Regulation, productivity and growth: OECD evidence. Economic Policy, 18(36). doi: 10.1111/1468-0327.00102.
Rebelo, S. (1991). Long-run policy analysis and long-run growth. Journal of Political Economy, 99(3). doi: 10.1086/261764.
Rodrick, D., A. Subramanian A., & Trebbi, F. (2004). Institutions rule: the primary of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2). doi: 10.1023/B:JOEG.0000031425.72248.85.
Romer, P. M. (1986). Increasing returns and long?run growth. Journal of Political Economy, 94(5). doi: 10.1086/261420.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5). doi: 10.1086/261725.
Schmookler, J. (1966). Invention and economic growth. Cambridge, Massachusetts: Harvard University Press. doi: 10.4159/harvard.9780674432833.
Schultz, T. W. (1961). Investments in human capital. American Economic Review, 51(1).
Shell, K. (1966). Toward a theory of inventive activity and capital accumulation. American Economic Review, 56(1/2).
Tientao, A., Legros, D., & Pichery, M.C. (2016). Technology spillover and TFP growth: a spatial Durbin model. International Economics, 14. doi: 10.1016/j.inteco.2015.04.004.
Ulubasoglu, M. A., & Doucouliagos, C. (2004). Institutions and economic growth: a systems approach. Melbourne: School of Accounting, Economics and Finance, Deakin University. Retrieved from: http://repec.org/esAUSM04/up. 29323.1076501864.pdf (20.03.2017).
Uzawa, H. (1965). Optimum technical change in an aggregative model of economic growth. International Economic Review, 6(1). doi: 10.2307/2525621.
Vandenbussche, J., Aghion, P., & Meghir, C. (2006). Growth, distance to frontier and composition of human capital. Journal of Economic Growth, 11(2). doi: 10.1007/s10887-006-9002-y.
Yu, J., de Jong, R., & Lee, L. (2008). Quasi-maximum likelihood estimators for spatial dynamic panel data with fixed effects when both N and T are large. Journal of Econometrics, 146(1). doi: 10.1016/j.jeconom.2008.08.002.
Żelazny, R., & Pietrucha, J. (2017). Measuring innovation and institution: the creative economy index. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(1). doi: 10.24136/eq.v12i1.3.
Acemoglu, D., Johnson, S., & Robinson, J.A. (2001). The colonial origins of comparative development. An empirical investigation. American Economic Review, 91(5). doi: 10.1257/aer.91.5.1369.
Acemoglu, D., Zilibotti, F., Aghion P. (2006). Distance to frontier, selection, and economic growth. Journal of the European Economic Association, 4(1). doi: 10.1162/jeea.2006.4.1.37.
Acemoglu, D. (2013). The world our grandchildren will inherit. In I. Palacios-Huerta (Ed.). In 100 years leading economists predict the future. Cambridge: MIT Press.
Aghion P., & Howitt, P. (1997). Endogenous growth theory. Cambridge, Massachusetts: The MIT Press.
Aghion, P., & Howitt, P. (1992). A model of growth through creative destruction. Econometrica, 60(2). doi: 10.2307/2951599.
Aghion, P., & Howitt, P. (2006). Appropriate growth policies: a unifying framework. Journal of the European Economic Association, 4(2?3). doi: 10.1162/jeea.2006.4.2-3.269.
Ali, M., Cantner, U., & Roy I. (2016). Knowledge spillovers through FDI and trade: the moderating role of quality-adjusted human capital. Journal of Evolutionary Economics, 26(4). doi:10.1007/s00191-016-0462-8.
Amann, E., & Virmani, S. (2014). Foreign direct investment and reverse technology spillovers: the effect on total factor productivity. OECD Journal: Economic Studies, 2014(1). doi: 10.1787/eco_studies-2014-5jxx56vcxn0n.
Anselin, L., Gallo, J. L., & Jayet, H. (2008). Spatial panel econometrics. In L. Mátyás & P. Sevestre (Eds.). The econometrics of panel data. Berlin: Springer-Verlag Berlin Heidelberg. doi: 10.1007/978-3-540-75892-1_19.
Arrelano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58(2). doi:10.2307/2297968.
Arrow, K. J. (1962). The economic implications of learning by doing. Review of Economic Studies, 29(3). doi: 10.2307/2295952.
Bae, Ch. (2016). R&D spillovers with endogenous absorptive capacity: lessons for developing countries. East Asian Economic Review, 20(2). doi: 10.2139/ssrn.2804910.
Balcerzak, A., & Pietrzak, M. (2016). Quality of institutions and total factor productivity in the European Union. Statistics in Transition new series, 17(3). doi: 10.21307/stattrans-2016-034.
Balta, N., & Mohl, P. (2013). The drivers of total factor productivity in catching-up economies. Quarterly Report on the Euro Area, 13(1).
Baltagi, B. (2013). Econometric analysis of panel data. Chichester: John Willey & Sons Ltd.
Becker, G. S., Murphy K. M., & Tamura, R. (1990). Human capital, fertility and economic growth. Journal of Political Economy, 98(5). doi: 10.1086/261723.
Belotti, F., Hughes, G., & Piano Mortari, A. (2016). Spatial panel data models using Stata. CEIS Tor Vergata Research Paper Series, 14(5).
Blomstro?m, M., & Kokko, A. (2011). Foreign direct investment and spillovers of technology. International Journal of Technology Management, 22(5-6). doi: 10.1504/IJTM.2001.002972.
Coe, D. T., Helpman, E., & Hoffmaister, A. W. (1997). North-south R&D spillovers. Economic Journal, 107(440). doi: 10.1111/1468-0297.00146.
Coe, D. T., & Helpman E. (1995). International R&D spillovers. European Economic Review, 39(5). doi: 10.1016/0014-2921(94)00100-E.
Danquah, M., Moral-Benito, E., & Ouattara, B. (2014). TFP growth and its determinants: a model averaging approach. Empirical Economics, 47(1). doi: 10.1007/s00181-013-0737-y.
Easterly, W., & Levine, R. (2001). It?s not factor accumulation: stylized facts and growth models. World Bank Economic Review, 15(2).
Eaton, J. & Kortum, S. (1996). Trade in ideas. Patenting and productivity in the OECD. Journal of International Economics, 40(3?4). doi: 10.1016/0022-1996(95)01407-1.
Elhorst, J. P. (2010). Dynamic panels with endogenous interaction effects when T is small. Regional Science and Urban Economics, 40(5). doi: 10.1016/j.regsciurbeco.2010.03.003.
Elhorst, J. P. (2017). Spatial panel data analysis. In S. Shekhar, H. Xiong & X. Zhou (Eds.) Encyclopedia of GIS. Cham: Springer International Publishing.
Fawaz, F., & Moghadam, M. (2013). Spatial dependence of technology spillovers among trading partners. Global Economy Journal, 13(1). doi: 10.1515/gej-2012-0031.
Feenstra, R. C., Inklaar R., & Timmer M. P. (2015). The next generation of the Penn World Table. American Economic Review, 105(10). doi: 10.1257/aer.20130954.
Fracasso, A., & Vittucci Marzetti, G. (2013). An empirical note on international R&D spillovers. Empirical Economics, 45(1). doi: 10.1007/s00181-012-0614-0.
Freire-Seren, M. J. (2001). R&D-expenditure in an endogenous growth model. Journal of Economics, 74(1).
Furková, A., & Chocholatá, M. (2017). Interregional R&D spillovers and regional convergence: a spatial econometric evidence from the EU regions. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(1). doi: 10.24136/eq.v12i1.1.
Griffith, R., Redding, S., & Van Reenen, J. (2004). Mapping the two faces of R&D: productivity growth in a panel of OECD industries. Review of Economics and Statistics, 86(4).
Grossman, G. M., & Helpman, E. (1991). Trade, knowledge spillovers and growth. European Economic Review, 35(2-3). doi: 10.1016/0014-2921(91)90153-A.
Guellec, D., & van Pottelsberghe de la Potterie, B. (2001). R&D and productivity growth: panel data analysis of 16 OECD countries. OECD Economic Studies, 2001(2). doi: 10.1787/eco_studies-v2001-art12-en.
Hsiao, C., Pesaran, M.H., & Tahmiscioglu, A.K. (2002). Maximum likelihood estimation of fixed effects dynamic panel data models covering short time periods. Journal of Econometrics, 109(1). doi: 10.1016/S0304-4076(01)00143-9.
Isaksson, A. (2007). Determinants of total factor productivity: a literature review. Staff Working Paper United Nations Industrial Development Organization, 02.
Islam, N. (2008). Determinants of productivity across countries: an exploratory analysis. Journal of Developing Areas, 42(1).
Jinji, N., Zhang, X., & Haruna, S. (2015). Trade patterns and international technology spillovers: evidence from patent citations. Review of World Economics, 151(4). doi: 10.1007/s10290-015-0223-z.
Kaldor, N. (1957). A model of economic growth. Economic Journal, 67(268). doi: 10.2307/2227704.
King, R. G., & Rebelo, S. (1990). Public policy and economic growth: developing neoclassical implications. Journal of Political Economy, 98(5). doi: 10.1086/261727.
Krammer, S. M. S. (2010). International R&D spillovers in emerging markets: The impact of trade and foreign direct investment. Journal of International Trade and Economic Development, 19(4). doi: 10.1080/09638190902792464.
Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1). doi: 10.1016/0304-3932(88)90168-7.
Madsen, J. B. (2007). Technology spillover through trade and TFP convergence: 135 years of evidence for the OECD countries. Journal of International Economics, 72(2). doi: 10.1016/j.jinteco.2006.12.001.
Madsen, J. B. (2008). Economic growth, TFP convergence and the world export of ideas: a century of evidence. Scandinavian Journal of Economics, 110(1). doi: 10.1111/j.1467-9442.2008.00530.x.
Mankiw, N., Romer D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2). doi: 10.2307/2118477.
McMorrow, K., Röger, W., & Turrini, A. (2010). Determinants of TFP growth: a close look at industries driving the EU?US TFP gap. Structural Change and Economic Dynamics, 21(3).
Nicoletti, G., & Scarpetta, S. (2003). Regulation, productivity and growth: OECD evidence. Economic Policy, 18(36). doi: 10.1111/1468-0327.00102.
Rebelo, S. (1991). Long-run policy analysis and long-run growth. Journal of Political Economy, 99(3). doi: 10.1086/261764.
Rodrick, D., A. Subramanian A., & Trebbi, F. (2004). Institutions rule: the primary of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2). doi: 10.1023/B:JOEG.0000031425.72248.85.
Romer, P. M. (1986). Increasing returns and long?run growth. Journal of Political Economy, 94(5). doi: 10.1086/261420.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5). doi: 10.1086/261725.
Schmookler, J. (1966). Invention and economic growth. Cambridge, Massachusetts: Harvard University Press. doi: 10.4159/harvard.9780674432833.
Schultz, T. W. (1961). Investments in human capital. American Economic Review, 51(1).
Shell, K. (1966). Toward a theory of inventive activity and capital accumulation. American Economic Review, 56(1/2).
Tientao, A., Legros, D., & Pichery, M.C. (2016). Technology spillover and TFP growth: a spatial Durbin model. International Economics, 14. doi: 10.1016/j.inteco.2015.04.004.
Ulubasoglu, M. A., & Doucouliagos, C. (2004). Institutions and economic growth: a systems approach. Melbourne: School of Accounting, Economics and Finance, Deakin University. Retrieved from: http://repec.org/esAUSM04/up. 29323.1076501864.pdf (20.03.2017).
Uzawa, H. (1965). Optimum technical change in an aggregative model of economic growth. International Economic Review, 6(1). doi: 10.2307/2525621.
Vandenbussche, J., Aghion, P., & Meghir, C. (2006). Growth, distance to frontier and composition of human capital. Journal of Economic Growth, 11(2). doi: 10.1007/s10887-006-9002-y.
Yu, J., de Jong, R., & Lee, L. (2008). Quasi-maximum likelihood estimators for spatial dynamic panel data with fixed effects when both N and T are large. Journal of Econometrics, 146(1). doi: 10.1016/j.jeconom.2008.08.002.
Żelazny, R., & Pietrucha, J. (2017). Measuring innovation and institution: the creative economy index. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(1). doi: 10.24136/eq.v12i1.3.
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Published
2018-03-31
How to Cite
Pietrucha, J., Żelazny, R., Kozłowska, M., & Sojka, O. (2018). Import and FDI as channels of international TFP spillovers. Equilibrium. Quarterly Journal of Economics and Economic Policy, 13(1), 55–72. https://doi.org/10.24136/eq.2018.003
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