Trade and R & D Spillovers: A Sectoral Panel Analysis

This paper examines the relationship between trade and R&D spillovers, and compares sectoral difference in trade-related R&D spillovers, using a data set comprised of eight sectors in the manufacturing industry of thirteen OECD countries from 1981 to 1999. The results in the panel estimation have shown the evidence to generally support the role of manufacturing import in international R & D spillovers. Furthermore, the sectoral panel evidence indicates that the role of import in the sectors of Basic Metals and Fabricated Metal Products & Machinery proves stronger and more significant in explaining trade-related R & D spillovers. This finding implies that the import of intermediate input is considered as a key channel for international R & D spillovers and technological diffusion, which is consistent with theoretical background and implication in the open economy endogenous growth model. This study is expected to contribute to better understanding of how trade influenceinte rnational R&D spillovers among countries.