International Knowledge Spillovers Research Articles

Global corporate income tax competition, knowledge spillover, and growth

Using a two-country model of endogenous growth with international knowledge spillovers, this study analyzes the welfare consequences of global corporate income tax competition. Although the Nash equilibrium tax rate can be excessively high or low according to the degree of spillover, this does not lead to significant welfare losses. The key to this outcome is that corporate income tax competition for growth maximization, which we consider hypothetically, attains the maximum growth rate despite complex externalities and strategic interactions.

Global value chains and knowledge spillover to local economy in Visegrad 4 countries

AbstractThis study empirically examines knowledge spillover in Visegrad Four (V4) countries, with an emphasis on global value chains (GVCs). Using patent statistics, the study aims to estimate the knowledge production function, including domestic and foreign knowledge stocks, and found that international knowledge spillover does not contribute much to the innovation of the local economy in the V4 countries because of three factors: i) multinational corporations' (MNCs) strategy to locate a low-cost production base, ii) MNCs' strategy to locate supporting (process, production or non-core product related) research and development (R&D) activities and iii) limited technology spillover effect from MNCs to local firms. Local firms in the V4 countries became dependent on the peripheral products and technologies provided by MNCs, and as a result, local R&D activities in the V4 countries were diverted from patentable innovation.

Revisiting international knowledge spillovers: the role of GVCs

Abstract The diffusion of knowledge is an important determinant of economic development. International trade has been established as a key mechanism in facilitating diffusion. The rise of global value chains (GVCs) has transformed trade in recent years. Yet the role of GVCs in giving rise to knowledge spillovers remains under-explored. In this paper, we study the elasticity of industry-level total factor productivity (TFP) to technology that is imported through intermediate trade in GVCs. To do so, we combine novel input–output decomposition methods with recent insights from the literature on the factor content of trade. We focus on a panel of 32 countries and 39 sectors over the 2000–2014 period using WIOD and OECD data. We find that domestic TFP is elastic to knowledge flows arising from GVCs and that the magnitude of this effect is larger relative to all other knowledge flows. We also find that GVC participation is particularly conducive to technology upgrading in countries that are far away from the technology frontier, and that GVC-related spillovers persist over large geographical distances.

International knowledge spillovers in energy technologies

This study examines the impact of barriers to knowledge diffusion in energy technologies in 29 countries from 1990 to 2015, distinguishing between efficient fossil-based generation and mature renewable options, namely wind and solar. We show that knowledge flows are higher in countries with similar technological profiles, particularly for mature renewables. The study finds that international knowledge spillovers have increased in intensity for wind and solar, while the opposite is true for fossil-based technologies. That means that foreign knowledge has increasingly informed domestic investors and points to the key role that knowledge flows from abroad had in promoting innovation in low-carbon technology options. Integrated assessment models should account for the role international knowledge spillovers play in the generation of new knowledge and in contributing to rapid decrease in costs.

International Knowledge Spillovers and Economic Growth: New Evidence from High-Tech Imports and R&D Cooperation

International Knowledge Spillovers and Economic Growth: New Evidence from High-Tech Imports and R&D Cooperation

KNOWLEDGE SPILLOVERS IN A NORTH-SOUTH ANALYSIS OF THE U.S. CHEMICAL INDUSTRY

ABSTRACT We use U.S. patent data to investigate how the growth of chemical manufacturing in South economies affects the number of patents obtained by chemical manufacturers in the U.S., and how it has altered international knowledge spillovers from South manufacturers to their counterparts in the U.S. We find that increased competition from chemical manufacturers in the South has pushed U.S. chemical firms to increase their patenting, but that U.S. manufacturers are not learning more from the innovators in the South. Keywords Patents, Spillovers, Innovation, Chemical.

Ideas production and international knowledge spillovers: digging deeper into emerging countries

Ideas production and international knowledge spillovers: digging deeper into emerging countries

Executives’ Foreign Work Experience and International Knowledge Spillovers: Evidence from China

ABSTRACT This study conducts a quantitative study on international knowledge spillovers by executives with foreign work experiences at Chinese firms. We use companies’ foreign patent citations as a proxy for international knowledge inflows and match the data with companies’ executives with foreign work experience. The results show that executives with overseas work experience generate international knowledge inflows to the firm; this linkage is influenced by the innovation capacities of the outflow countries and specific positions of the firm’s executives. The knowledge inflows enhance firms’ innovation capacities, as evidenced by an increase in the number of patent applications and citations.

How much do global value chains boost innovation?

AbstractThis paper investigates whether participation in global value chains (GVCs) fosters innovation. Using industry‐level patent data for 25 countries, we estimate how the pool of foreign R&D expenditure available through global value chains affects the production of ideas at home. We find that GVCs boost innovation on average by 5% both in developed and emerging economies. We further show that international knowledge spillovers require good absorptive capacity in the knowledge‐receiving country and that their strength depends on both forward and backward GVC linkages.

Energy efficiency: The role of technological innovation and knowledge spillover

It is widely accepted that technological innovation reduces energy intensity and carbon emissions without compromising global economic growth. Although new innovative developments tend to be concentrated in a few developed countries, transboundary spillover of technological innovation influences the energy efficiency and sectoral performance of other countries. A more thorough assessment of international knowledge spillover related to energy intensity reduction can enhance understanding of mitigation opportunities and costs. This study investigated, therefore, the effects of technological innovation within certain countries on the energy efficiency performance of neighboring countries. We used data from the OECD Triadic Patent Families database for 24 innovating countries between the years 1994 and 2013. Accounting for geographical distance, our results showed a positive, significant relationship between knowledge spillover and country-specific energy efficiency performance. All countries showed a sustainable efficiency growth trend, which indicates a steady increase in energy efficiency. Germany, France, the UK, the Netherlands, and Switzerland are the most energy efficient countries. These results have policy implications for sustainable energy management and environmental sustainability, highlighting the need to develop domestic research and development capabilities that increase innovation-based infrastructure.

International Knowledge Spillovers and Capital Structure of Multinational Affiliates

This paper investigates how knowledge transferred within multinational corporations affects capital structure decisions of foreign affiliates. Employing the unique dataset on Korean multinationals and their employment structure of foreign affiliates, we measure the knowledge transfer through human interactions using the ratio of expatriate managers to total employees. We document that affiliates with more expatriate managers tend to maintain lower leverage, suggesting the affiliates with high level of intangible assets passed to through expatriate managers opt for low debt financing. We further show that the negative effect on leverage is more pronounced when parents/affiliates are involved with greater intangible assets and the host countries have less knowledge assets in place. Our two stage least square estimation also confirms the negative relation between expatriate managers and financial leverage in foreign affiliates.

Following the paper trail: the UK scientific and technological knowledge space and its reliance on international knowledge spillovers

ABSTRACT Knowledge is an essential ingredient for economic development, growth and gaining a competitive advantage. In order to produce novel and valuable knowledge, it is advantageous, perhaps vital, to rely on insights gained from prior research efforts. Those knowledge spillovers (KS) provide the rationale for sustained economic growth and produce unique place-based knowledge spaces. Due to the spatial embeddedness and stickiness of knowledge, most investigations mainly pay attention to the localized nature of KS, but what about those spillovers from other jurisdictions, or perhaps even from across the globe? To analyse the role played by international KS, the present study investigates to what extent international KS shape the evolution of the UK science and technology space. The first step involves creating knowledge spaces following the methodology outlined by Kogler et al. (2013; 2017) for the period 2006–15. Subsequently, we are following the paper trail of publications and patents developed by UK authors and inventors to depict to what degree international KS in specific science and technology domains have contributed to the production of novel knowledge in the UK. The results indicate that four out of five citations made in publications and patents in the UK are the works of authors and inventors residing elsewhere. This has important policy implications considering recent tendencies to curtail trade and the free movement of labour, all of which contribute to the diffusion of knowledge.

Near or far Spillovers in patenting, quality upgrading, and product releases

The diffusion of knowledge plays a central role in endogenous growth theories. In these models, new knowledge can be generated from pre-existing knowledge produced anywhere in the world. Endogenous growth theories rely on a broad set of assumptions that have not been tested sufficiently, especially in the context of developing economies. This paper empirically assesses the scope and direction of knowledge spillovers in patenting at the country level and, separately, in product releases and quality upgrading by firms. The first set of exercises tests whether the cumulative knowledge specifications of the knowledge production function can explain international patterns of patenting or whether only domestic research and development is necessary to produce patents. The second set of exercises analyses whether sound product-quality upgrading and the introduction of new products depend on these same variables at the industry level across countries. The evidence supports the view that existing stocks of domestic and international knowledge boost national innovation and entrepreneurship in the form of product innovation. More specifically, the evidence suggests that domestic and international knowledge spillovers are positive, but international spillovers can be negative for firms that are far from innovative firms in terms of productivity.

Audit committee returnees and auditor choice: evidence from China

PurposeThe purpose of this paper is to examine whether the presence of returnees serving on the audit committee affects auditor choice in emerging markets.Design/methodology/approachUsing a logistic model, this study tests the relationship between the presence of returnees in the audit committee and auditor selection and how this relationship varies with the level of agency costs. The authors also perform several other additional analyses to ensure the robustness of the results, including propensity score matching, Heckman’s two-stage model and change analysis.FindingsUsingA-share listed companies in China from 2008 to 2016, the authors find a positive association between the presence of audit committee returnees and a demand for high-quality auditors and such association is strengthened in firms with a higher level of agency costs. The authors further find that discretionary accruals and the incidence of financial restatements are lower in firms with audit committee returnees.Research limitations/implicationsAlthough this study focuses on audit committee members with foreign study or foreign work experience, it remains to be seen if similar effects could be achieved through foreign ownership or work experience with foreign customers or suppliers.Originality/valueThis study provides evidence on a new channel of international knowledge spillover through which the emigration of talent increases board monitoring by demanding high-quality auditors in an emerging economy.

Sources and Channels of International Knowledge Spillovers in ASEAN‐5: The Role of Institutional Quality

AbstractAssociation of Southeast Asian Nations (ASEAN) is a dynamic and outward‐looking regional economy, which has made notable progress in expanding trade and investment. This paper examines whether knowledge spillovers are prevalent among ASEAN‐5, focusing on the issues of which channels and which sources are the potential drivers of total factor productivity. The findings reveal that the key spillover channels are exports and non‐capital imports coming from source countries such as the Organisation for Economic Co‐operation and Development (OECD) countries, the G7 countries. The institutional quality plays an instrumental role in increasing total factor productivity through foreign direct investment, especially when the spillovers originate from the OECD and the G7. © 2020 John Wiley & Sons, Ltd.

Diversification or convergence

PurposeAs an innovation model for infrastructure and public service delivery, public–private partnership (PPP) has been widely adopted around the world. The knowledge spillover effect and policy diffusion mechanism have played an important role in promoting the development of PPP in the context of globalization. A comparative evaluation of the policy and management of PPP in different countries will help to understand the development of PPP, provide decision-making reference for PPP policy embedded with specific national conditions of each country, and also contribute to the global PPP knowledge body.Design/methodology/approachBased on the principle of comparability and representativeness, this study selected three countries, namely, China, India, and the United Kingdom for comparative analysis. This study first introduced the policy process and key institutions of PPP in three countries. Secondly, a comparative analysis of the development characteristics and application of PPP was conducted based on the official database of three countries. Finally, the differences, influencing factors and development trends of international PPP development were analyzed based on the comparative research results, and suggestions for PPP policy and management were put forward.FindingsThe research results indicate the development fluctuation and unbalanced spatial distribution of PPPs are a common phenomenon in the three countries. The UK has a significant impact on the policy and development of PPP in other countries. However, under the combined influence of factors such as economic, urbanization, political regime and social culture, there are significant differences in the PPP institution, application, and project characteristics in various countries. Due to international exchanges and knowledge spillovers, as well as the promotion of intermediaries, the development of PPP worldwide tends to converge.Practical implicationsThrough conducting an international comparison of PPPs based on project data, this study provides a detailed and visualized overview of PPPs and a better understanding of PPP policy and management in different countries. The findings will be of interest to PPP investors, officers, practitioners, policymakers, researchers, and analysts. It enriches the portrait of global PPP market research, helps governments to improve the design of PPP institutions and policies, and provides references for decision-making of international investors when stepping into a new market.Originality/valueThis study is the first attempt to systematically compare and analyze the global PPP difference and development trend based on PPP project databases of different countries. Different from previous PPP comparative research based on perception data, the project data-based comparative analysis in this study is helpful to understand the characteristics, interrelations, and trends of global PPP development and enrich the existing PPP knowledge body. This study also proposes that it is possible to establish a global PPP knowledge community in the context of globalization and global production network.

The emergence of renewable energy technologies at country level: relatedness, international knowledge spillovers and domestic energy markets

ABSTRACT Global sustainable development critically depends on a fundamental transformation of our current energy systems. This paper looks at how countries develop different types of renewable energy technology to achieve this transformation. We highlight the place-dependence in the global innovation systems of renewable energy technologies by focusing on how countries benefit from local and global knowledge. We show that both the relatedness of a country’s knowledge base, and international knowledge spillovers contribute to the development of renewable energy technologies. For low- and middle- income countries, domestic markets for renewables play a crucial role in absorbing and utilising these international knowledge spillovers. The results provide a better understanding of how countries can acquire new knowledge in renewable energy technologies.

The Effects of Regional Economic Communities on Industrialization: The Case of COMESA

AbstractThis paper seeks to establish the contribution of the Common Market for Eastern and Southern Africa (COMESA) programmes in promoting industrialization. It further seeks to establish the link between industrialization and productivity. The paper uses a gravity model to estimate a cross‐sectional time‐series (panel) dataset for the period 2001–2015. The results indicate that membership to COMESA has created large markets and promoted industrialization among member states. However, results also confirm that COMESA member states still heavily trade in industrial intermediates with non‐members. The study further reveals that the share of foreign total factor productivity (TFP) to COMESA's TFP are weaker than expected, which suggests non‐convergence to international knowledge spillovers. The study concludes that COMESA programmes have positively affected industrialization. We therefore recommend that COMESA should continue implementing strategies, policies and programmes that promote industrialization and technology transfer.

Using panel VAR to analyze international knowledge spillovers

AbstractTechnology diffusion often plays a critical role in models of trade and economic growth. Most existing empirical tests for international technology spillovers suggest some role for spillovers in explaining productivity growth. It has been relatively difficult, however, to identify separate roles for the direct and indirect channels of knowledge spillovers. The influence of these channels is often confounded owing to the focus on total‐factor productivity (TFP) and R&D spending within a cross‐section or panel data setting. This paper employs an alternative methodology to investigate the role of direct knowledge spillovers. Using citation‐weighted domestic patents, citation‐weighted foreign patents and value added for 14 U.S. manufacturing industries over the period 1977 to 2004 a panel VAR methodology is employed to investigate the dynamic role of direct and indirect knowledge spillovers. Evidence for the role of the direct knowledge spillovers channel is found—an increase in citation‐weighted patents abroad directly increases the measure of domestic citation‐weighted patents, after accounting for the influence of productivity/value added. The role of foreign innovative activity, however, is small relative to the role of U.S. innovative activity in explaining the dynamics of industry value added.

Cross-country Knowledge Spillovers and Innovations in Less Developed Countries in the Context of the Schumpeterian Growth Model

We develop a theoretical model that focuses on the effects of international knowledge spillovers on the country’s horizontal (variety expansion) and vertical (quality-improving) RD however, our results emphasize the importance of developing domestic R&D projects and improving the efficiency of those projects for LDC rather than relying on foreign knowledge spillovers. In the presence of sunk costs, nonetheless, running efficient R&D projects is justified only when the country is relatively large in size.