Lee Branstetter

Are knowledge spillovers international or intranational in scope? ☆: Microeconometric evidence from the U.S. and Japan

In this paper, I provide new estimates of the relative impact of intranational and international knowledge spillovers on innovation and productivity at the firm level, using previously unexploited panel data from the U.S. and Japan. My estimates suggest that knowledge spillovers are primarily intranational in scope, providing empirical confirmation of an important assumption in much of the theoretical literature. The implications of this finding are discussed in the conclusion.

Are Knowledge Spillovers International or Intranational in Scope? Microeconometric Evidence from the Japan and the United States

In this paper, I provide new estimates of the relative impact of intranational and international knowledge spillovers on innovation and productivity at the firm level, using previously unexploited panel data from the U.S. and Japan. My estimates suggest that knowledge spillovers are primarily intranational in scope, providing empirical confirmation of an important assumption in much of the theoretical literature. The implications of this finding are discussed in the conclusion.

When Do Research Consortia Work Well and Why? Evidence from Japanese Panel Data

We examine the impact of a large number of Japanese government-sponsored research consortia on the research productivity of participating firms by measuring their patenting in the targeted technologies before, during, and after participation. Consistent with the theoretical predictions of Katz (1986) and others, we find consortium outcomes are positively associated with the level of potential R&D spillovers within the consortium and (weakly) negatively associated with the degree of product market competition among consortium members. Furthermore, our evidence suggests that consortia are most effective when they focus on basic research.

China's Embrace of Globalization

As China has become an increasingly important part of the global trading system over the past two decades, interest in the country and its international economic policies has increased among international economists who are not China specialists. This paper represents an attempt to provide the international economics community with a succinct summary of the major steps in the evolution of Chinese policy toward international trade and foreign direct investment and their consequences since the late 1970s. In doing so, we draw upon and update a number of more comprehensive book-length treatments of the subject. It is our hope that this paper will prove to be a useful resource for the growing numbers of international economists who are exploring China-related issues, either in the classroom or in their own research.

Intellectual Property Rights, Foreign Direct Investment and Industrial Development

This paper develops a North-South product model in which Southern imitation and the North-South flow of foreign direct investment (FDI) are endogenously determined. In the model, a strengthening of IPR protection in the South reduces the rate of imitation, which, in turn, increases the flow of FDI. The increase in FDI more than offsets the decline in production undertaken by Southern imitators, so that the Souths share of goods produced by the global economy increases. Furthermore, real wages of Southern workers increase even though prices of goods produced by multinationals exceed those of Southern imitators. The preceding results hold when Northern innovation is endogenously determined; in addition, the rate of innovation increases with a strengthening of Southern IPR protection.

Looking for International Knowledge Spillovers: A Review of the Literature with Suggestions for New Approaches

This paper reviews the recent empirical literature on international knowledge spillovers. I start by summarizing the theoretical models that have highlighted the potential importance of these spillovers. Then, drawing upon the older micro productivity research tradition, I lay out a simple conceptual framework (though not a formal theoretical framework) for thinking about the various kinds of knowledge transfers that may exist, how they might be mediated, and the means by which their effects might be traced empirically. I then review some influential empirical papers, demonstrating that empirical work to date may very well not have identified the effects the authors set out to measure. Finally, I describe some promising new approaches which may allow researchers in this field to identify more precisely, both conceptually and empirically, certain kinds of international knowledge spillovers.

Globalization and technology absorption in Europe and Central Asia : the role of trade, FDI, and cross-border knowledge flows

This study analyzes the extent of knowledge and technology absorption for firms in Europe and Central Asia (ECA), as well as the factors that influence absorption, using statistical analyses of various data sources, including the World Bank enterprise surveys, patent databases maintained by the United States (U.S.) and European patent offices, and case studies. The study addresses the following issues: (i) what can we learn from patents and patent citations about international knowledge flows and cross-national technological cooperation in ECA? (ii) How does openness to trade, participation in global supply networks, and investment in human capital, via on-the-job training, enhance knowledge and technology absorption in ECA-region manufacturing firms? How does foreign direct investment (FDI) stimulate acquisition of managerial and technical skills, new machinery and equipment, and market development?

Exploring the Link Between Academic Science and Industrial Innovation

Over the last fifteen years, patent citations to scientific articles have increased rapidly. Is this indicative of increasingly powerful knowledge spillovers from academic science to industrial innovation? This paper seeks to shed light on that question by conducting statistical analysis of the universe of patent citations to scientific research papers found in a random sample of nearly 30,000 U.S. patents issued between 1983 and 1996. I find evidence that the propensity of patents to cite academic science has risen sharply, even controlling for changes in the volume and distribution across fields of U.S. patents. I also find that patent citations to science are concentrated in a narrow set of fields of science and technology. Finally, I provide evidence that patents which cite science are of significantly higher quality than patents that do not.

Facts and Fallacies about U.S. FDI in China

Despite the rapid expansion of U.S.-China trade ties, the increase in U.S. FDI in China, and the expanding amount of economic research exploring these developments, a number of misconceptions distort the popular understanding of U.S. multinationals in China. In this paper, we seek to correct four common misunderstandings by providing a statistical portrait of several aspects of U.S. affiliate activity in the country and placing this activity in its appropriate economic context.

Going Soft: How the Rise of Software Based Innovation Led to the Decline of Japan's it Industry and the Resurgence of Silicon Valley

This paper documents a shift in the nature of innovation in the information technology (IT) industry. Using comprehensive data on all IT patents granted by the USPTO from 1980-2002, we find strong evidence of a change in IT innovation that is systematic, substantial, and increasingly dependent on software. This change in the nature of IT innovation has had differential effects on the performance of the IT industries in the United States and Japan. Using a broad unbalanced panel of US and Japanese publicly listed IT firms in the period 1983-1999, we show that (a) Japanese IT innovation relies less on software advances than US IT innovation, (b) the innovation performance of Japanese IT firms is increasingly lagging behind that of their US counterparts, particularly in IT sectors that are more software intensive, and (c) that US IT firms are increasingly outperforming their Japanese counterparts, particularly in more software intensive sectors. The findings of this paper thus provide a fresh explanation for the relative decline of the Japanese IT industry in the 1990s. Finally, we provide suggestive evidence consistent with the hypothesis that human resource constraints played a role in preventing Japanese firms from adapting to the shift in the nature of innovation in IT.