International Knowledge Flows and Productivity: Intra- vs. Inter-Industry Spillovers

Abstract: The effects of international knowledge spillovers on total factor productivity (TFP) at the industry level are examined by using a panel of 13 manufacturing industries across 15 OECD countries over 23 years. We distinguish between intra- and inter-industry spillovers from the information on patent applications and citations. Patent data are taken from the Japan Patent Office and the United States Patent and Trademark Office. Using four alternative spatial panel estimation techniques, we find that international knowledge spillovers within the same industry significantly contribute to sectoral TFP. In contrast, there is little evidence of a positive effect of international knowledge spillovers on TFP across industries.