How special is the special relationship? Using the impact of US R&D spillovers on UK firms as a test of technology sourcing

Rachel Griffith, Rupert Harrison and John van Reenen
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Rupert Harrison: Institute for Fiscal Studies

No W04/32, IFS Working Papers from Institute for Fiscal Studies

Abstract: How much does US-based R&D benefit other countries and through what mechanisms? We test the 'technology sourcing' hypothesis that foreign research labs located on US soil tap into US R&D spillovers and improve home country productivity. Using panels of UK and US firms matched to patent data we show that UK firms who had established a high proportion of US-based inventors by 1990 benefited disproportionately from the growth of the US R&D stock over the next 10 years. We estimate that UK firms? Total Factor Productivity would have been at least 5% lower in 2000 (about $14bn) in the absence of the US R&D growth in the 1990s. We also find that technology sourcing is more important for countries and industries who have 'most to learn'. Within the UK, the benefits of technology sourcing were larger in industries whose TFP gap with the US was greater. Between countries, the growth of the UK R&D stock did not appear to have a major benefit for US firms who located R&D labs in the UK. The 'special relationship' between the UK and the US appears distinctly asymmetric.

Keywords: international spillovers; technology sourcing; productivity (search for similar items in EconPapers)
JEL-codes: F23 O32 O33 (search for similar items in EconPapers)
Pages: 53 pp.
Date: 2004-12-08
New Economics Papers: this item is included in nep-bec, nep-eec and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Journal Article: How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing (2006)
Working Paper: How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing (2004)
Working Paper: How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing (2004)
Working Paper: How special is the special relationship?: using the impact of R&D spillovers on UK firms as a test of technology sourcing (2004)
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