International R&D Spillovers,Absorptive Capacity and Relative Backwardness: A Panel Smooth Transition Regression Model |
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Authors: | Andrea Fracasso |
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Affiliation: | Department of Economics and Management, University of Trento, via Inama 5, 38122 Trento, Italy |
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Abstract: | We investigate how a country's absorptive capacity and relative backwardness affect the impact of international R&D spillovers on domestic Total Factor Productivity (TFP). To account for nonlinearities, we adopt a Panel Smooth Transition Regression approach, where a country's TFP elasticity to the foreign R&D stock is allowed to change smoothly across various identified extreme values, and the change is related to observable transition variables: human capital (capturing the country's absorptive capacity) and relative backwardness. The results suggest that absorptive capacity is positively associated with international R&D spillovers. In contrast with previous results, relative backwardness is instead found to have a negative and significant impact on international knowledge spillovers. |
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Keywords: | Absorptive capacity international R& D spillovers nonlinear panel smooth transition regression total factor productivity |
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