TY  - JOUR
AU  - Keller,Wolfgang
TI  - Geographic Localization of International Technology Diffusion
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7509
PY  - 2000
Y2  - January 2000
UR  - http://www.nber.org/papers/w7509
L1  - http://www.nber.org/papers/w7509.pdf
N1  - Author contact info:
Wolfgang Keller
Department of Economics
University of Colorado-Boulder
Boulder, CO 80309-0256
Tel: 303/735 5507
Fax: 303/492 8960
E-Mail: Wolfgang.Keller@colorado.edu
AB  - Convergence in per capita income across countries turns on whether technological knowledge spillover are global or local. This paper estimates the amount of spillover from R&D expenditures in major industrialized countries on a geographic basis.  A new data set is used which encompasses most of the world's innovative activity at the industry-level between the years 1970 and 1995.  First, I find that technological knowledge is to a substantial degree local, not global, as the benefits from foreign spillover are declining with distance: on average, a 10% higher distance to a major technology-producing country such as the U.S. is associated with a 0.15% lower level of productivity.  Second, technological knowledge has become more global over the sample period.  As a determinant of productivity, foreign R&D has significantly gained in importance relative to domestic R&D, and the extent to which knowledge spillover decline with distance has fallen by 20%.  The finding of a falling but still high degree of localization has important implications for macroeconomics and growth, trade, and regional economics.
ER  -