Working Paper: CEPR ID: DP1467
Authors: Tamim Bayoumi; David T. Coe; Elhanan Helpman
Abstract: We examine the growth promoting roles of R&D, international R&D spillovers, and trade in a world econometric model. A country can raise its total factor productivity by investing in R&D. Countries can also boost their productivity by trading with other countries that have large ?stocks of knowledge? from their cumulative R&D activities. We use a special version of MULTIMOD that incorporates R&D spillovers among industrial countries and from industrial countries to developing countries. Our simulations suggest that R&D, R&D spillovers, and trade play important roles in boosting growth in industrial and developing countries.
Keywords: productivity; R&D spillovers; North-South
JEL Codes: 031; 040
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| R&D investment (O32) | TFP (F16) |
| TFP (F16) | Output Growth (O40) |
| R&D investment (O32) | Output Growth (O40) |
| R&D investment (O32) | International R&D Spillovers (O39) |
| International R&D Spillovers (O39) | Output in Other Countries (F29) |
| Trade (F19) | International R&D Spillovers (O39) |