Relative Backwardness or Absorptive Capacity: How Does Knowledge Spill Over Across Borders?

University of Nottingham Research Paper No. 2005/07

30 Pages Posted: 2 Aug 2005

See all articles by Rod Falvey

Rod Falvey

Bond University - Department of Economics

David Greenaway

University of Nottingham - School of Economics

Neil Foster-McGregor

UNU-MERIT

Abstract

In this paper we search for evidence of North-South trade-related knowledge spillovers from a sample of five major OECD countries to 45 developing countries using panel data. We then extend the analysis to examine whether the impact of domestic factors affects the extent of knowledge spillovers. In particular, we investigate whether knowledge spillovers are stronger, the further a country is behind the technological leader, or whether they are stronger in countries with higher levels of absorptive capacity. Our results suggest that the impact of trade-related knowledge spillovers on growth does not depend upon how far a country is behind the technological leader, but that knowledge spillovers are stronger in countries with higher levels of absorptive capacity.

Keywords: Absorptive capacity, backwardness, economic growth, knowledge spillovers

JEL Classification: F43, O30, O40

Suggested Citation

Falvey, Rod and Greenaway, David and Foster-McGregor, Neil, Relative Backwardness or Absorptive Capacity: How Does Knowledge Spill Over Across Borders?. University of Nottingham Research Paper No. 2005/07, Available at SSRN: https://ssrn.com/abstract=764447 or http://dx.doi.org/10.2139/ssrn.764447

Rod Falvey (Contact Author)

Bond University - Department of Economics ( email )

Bond University - Department of Economics
Gold Coast, Queensland 4229
Australia

David Greenaway

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5469 (Phone)
+44 115 951 4159 (Fax)

Neil Foster-McGregor

UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

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