International R&D Spillovers through Information Networks

This paper shows that consideration of the role of direct spillovers through information networks is crucial in empirical studies of international R&D spillovers. Data on line penetration rates are used to construct foreign R&D capitals that directly spill over across borders. The conspicuous indirect effects through imports of intermediate goods shown in previous studies diminish considerably when the estimation controls for direct effects. Instead, direct spillovers are strong and significant. In the 1980s, direct effects were stronger than in the 1970s, especially among G7 countries. Indirect effects were insignificant in the 1970s and were significantly negative in the 1980s. KCI Citation Count: 1