Working Paper #2021-015
Foreign R&D spillovers to the USA and strategic reactions
We re-consider the traditional result of zero or negative foreign R&D
spillovers or strategic reactions to the USA using accumulated shocks in
a vector-error-correction model (VECM) for the period 1963-2017. Foreign
private and public R&D stocks have a positive and statistically
significant effect on US public R&D and labour-augmenting technical
change (LATC). US private R&D reacts positively to foreign private R&D
and negatively to foreign public R&D shocks. Foreign public and private
R&D react positively to US public R&D. All variables react positively to
US private R&D. From the time profile of the simulated VECM, we
calculate the sum of discounted (at 4%) net gains for (i) additional
private and public US R&D, and (ii) for policies reacting to foreign
private and public R&D shocks with additional domestic private and
public R&D. Additional private and public US R&D expenditures have very
high internal rates of return. R&D investments in reaction to shocks
from foreign R&D are profitable. All LATC reactions are transitional
suggesting semi-endogenous growth for the USA.
- Keywords
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- Growth
- productivity
- R&D
- reaction functions
- spillovers
- CVAR
- JEL codes
-
- C51
- O30
- O38
- O47
- O51
Cite this as
APA 7th ed.Ziesemer, T. (2021). Foreign R&D spillovers to the USA and strategic reactions (UNU-MERIT Working Paper No. 2021-015). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=8748