Trade, Patents, and International Technology Diffusion

Abstract

This paper investigates similarities and differences between developed and less developed countries in international technology diffusion. We measure international technology spillovers in trade, patents, and in disembodied forms. We find that all countries benefit from foreign technology. However, DCs and LDCs benefit from different pools of foreign technology. Total factor productivity in DCs is associated with world R&D input, while that in LDCs with locally patented foreign technology. We identify several determinants of the foreign patenting rate. Patent protection is found to be a key for LDCs to receive foreign technology.