International R&D Spillovers and Marginal Social Returns on R&D

Thursday 16 March 2017, 4.00PM to 5.00pm

Speaker(s): Professor Kazuo Ogawa, ISER, Osaka University

Abstract
This study analyzes the effects of international R&D spillovers on recipient countries from the viewpoint of social and private returns on R&D, using country panel data of 27 OECD and EU countries from 1995 to 2008. Our study is novel in that we estimate the social returns on R&D by incorporating the channel through which a change in the R&D stock of one country is propagated into the R&D activities of other countries and then compare the social returns thus computed with the private returns. We consider two channels of R&D spillovers across borders. In one channel R&D spillovers are embodied in trade flows. In the other channel R&D spillover is transmitted in disembodied form of bilateral technological proximity. We find that the marginal social returns on R&D are much larger than the marginal private returns for R&D-intensive countries, irrespective of spillover measures. The marginal social returns on R&D are more than twice as large as the marginal private returns for R&D-intensive countries. We also find that the embodied spillover channel through import flows is more important than the disembodied spillover channel in the sense that the marginal social returns are much larger than the marginal private returns in the embodied channel.

Location: Economics Staff Room A/EC202

Admission: Staff & PhD Students