International R&D spillovers, absorptive capacity and relative backwardness: a panel smooth transition regression model

Andrea Fracasso and Giuseppe Vittucci Marzetti

No 1203, Department of Economics Working Papers from Department of Economics, University of Trento, Italia

Abstract: We investigate how the 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 (PSTR) approach, where the country�s elasticity of TFP to foreign R&D stock is allowed to change smoothly across various identified extreme values, and this 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 addition, and in contrast with previous results, relative backwardness has a negative and significant impact on them.

Keywords: Absorptive capacity; International R&D spillovers; Nonlinear panel; Smooth Transition Regression; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: C23 C24 F43 O30 O47 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cse and nep-ino
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Citations: View citations in EconPapers (3)

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Journal Article: International R&D Spillovers, Absorptive Capacity and Relative Backwardness: A Panel Smooth Transition Regression Model (2014)
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