Does international knowledge spillover always lead to a positive trickle down?

Abstract

This paper demonstrates the negative effects of positive international knowledge spillovers on economic growth. In other words, we obtain the possibility that educational investment for human capital is crowded out under global economic growth. To this end, we assume the phenomenon of international knowledge spillover, effects of population growth on human capital accumulation, and non-unity intertemporal elasticity of substitution in an endogenous growth model along the lines developed by Arnold. This model comprises R&D activities along the lines proposed by Jones and human capital accumulation along the lines proposed by Uzawa and Lucas. The results show that even if international spillover increases, low-growth traps without human capital investment emerge in some cases, for example, an economy with a large intertemporal elasticity of substitution and a high population growth rate.