Technology Spillovers and International Borders: A Spatial Econometric Analysis

Amjad Naveed and Nisar Ahmad

No 2, Working Papers from University of Southern Denmark, Centre for Border Region Studies

Abstract: The borders of the EU are open for the movement of resources but still there can be some strong negative effects of international borders on productivity and knowledge spillovers compared to the internal regional borders. These negative effects could be due to language barriers, cultural differences, local rules and regulation, legal issues, property rights, etc. These effects of international borders have economic significance that needs to be controlled when analyzing the regional knowledge spillovers. This aspect related to international borders has not been fully taken into account in the existing literature related to knowledge spillovers. Ignoring this effect might under or overestimate the effect of knowledge and technology spillovers. The results show that technology and knowledge spillovers are mainly coming from internal neighbor regions only, whereas spillovers across the international borders are statistically insignificant. Moreover, the results show that not properly incorporating border effects will lead to inaccurate estimates of the spillovers.

Keywords: total factor productivity; knowledge spillovers; European regions; spatial econometrics; Extended Spatial Durbin Model (search for similar items in EconPapers)
JEL-codes: C31 D24 O49 O52 R10 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-09
New Economics Papers: this item is included in nep-cse, nep-eff, nep-eur, nep-geo, nep-ger, nep-int and nep-ure
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