International knowledge spillovers through the import of information technology commodities

Using the panel data from 1981 to 2000 of 17 Organization for Economic Co-operation and Development (OECD) countries, we investigate the role of the trade flow of information technology (IT) commodities in international knowledge spillovers. We use the group mean fully modified ordinary least squares (OLS) estimator, proposed by Pedroni ( 2000 ), that allows for greater flexibility in the presence of heterogeneity of cointegrating vectors among countries under panel cointegration. The results of estimation confirm statistically significant positive effects of IT imports on international knowledge spillovers. In contrast, non-IT imports turn out to have negative effects on the productivity of importing countries.