International R&D spillovers revisited

Using newly constructed panel data from seventeen OECD countries during 1971-2000, this paper examines the effect of international R&D spillovers via intermediate goods imports on a country's productivity. Estimation models are built on the model of Coe and Helpman ( 1995). They are tested and estimated using improved econometric techniques for panel cointegration test and estimation. Estimation results confirm the robust positive effect of international R&D spillovers through the channel of intermediate goods imports. This contradicts recent skepticism about the results of Coe and Helpman ( 1995) that has been raised with the development of panel data econometrics.