Exploring the Existence of Local and Global Knowledge Spillovers:Evidence from Plant‐Level Data*

We investigate the existence of local (within‐country) and global (between‐country) knowledge spillovers within a single analytical framework. Our study is based on a detailed database of domestically owned and foreign‐affiliated manufacturing plants located in Ireland. The results of our econometric analysis show that domestically owned plants benefit from the research and development (R&D) activities of other domestically owned plants, as well as from R&D activities conducted in the country of origin of foreign‐owned plants through their presence in Ireland. A fundamental difference between such locally generated and locally transmitted global spillovers appears to be that the latter are much less constrained by distance decay effects.     

The Evolution of the Distribution of Plant Size: Evidence from Luxemburg

In a recent paper, [Cabral, L. M. B. and J. Mata, 2003, American Economic Review, 93, 1075–1090] using Portuguese manufacturing data have shown for the first time that the plant size distribution is significantly right-skewed at the early part of the life cycle and then changes to become more log-normal. Using a similar proxy for plant age we compare this stylised fact for both Luxembourg manufacturing and services. Use of plants’ true age, however, reveals that the size distribution reverses back towards right-skewness for very old plants. We confirm the finding that the right-skewness is likely driven by financial constraints. The first author gratefully acknowledges financial support from the National Research Fund of Luxembourg. We are grateful for comments by an anonymous referee.