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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 30, No. 3, pp.319-352
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2017
Received 06 Mar 2017 Revised 11 Jul 2017 Accepted 26 Jul 2017

Knowledge Spillovers across Developing Economies

Manjinder Kaur ; Lakhwinder Singh
Manjinder Kaur, Research Fellow, Department of Economics, Punjabi University, Patiala, 147002, India, Tel: +91-7696734939, Fax: 91+175-2283073 manukaur30@yahoo.in
Lakhwinder Singh, Professor and Coordinator, Centre for Development Economics and Innovation Studies (CDEIS), Department of Economics, Punjabi University, Patiala, 147002, India, Tel: +91-9888755642, Fax: 91+175-2283073 lakhwindergill@pbi.ac.in

JEL Classification: O3, O4, O32, F14

Abstract

Globalization has dramatically transformed the world economy during the last quarter of 20th century and more vigorously in the first decade and a half in the 21st century. The most important characteristic of this phase of globalization is the rise of cross border flows of trade, investment, finance and technological knowledge. The rising investment in technological knowledge drives increasingly the long term growth process of the developing economies. It is increasingly realized that the level of trade and FDI across borders effects the knowledge generation and dissemination across countries. In this study an attempt is made to examine the relationship between economic growth measured through total factor productivity and knowledge economy variables such as domestic and foreign R&D covering the period of 2001-2012 across 19 developing countries. The regression analysis used in this study is based on panel data analysis using fixed effects models. The results of the study reveals that domestic knowledge stock, openness and the interaction terms of foreign R&D spillovers with openness, human capital and FDI have shown positive impact on total factor productivity of selected 19 developing economies. Further, the impact of foreign knowledge spillovers channeled through the imports of total goods and services are found to be positive and significant while it has been found negative in case of capital goods. An important policy implication that results from this analysis is that the higher level of human capital and international trade results into higher level of productivity growth via knowledge spillovers.

Keywords:

Domestic R&D Spillovers, Foreign Spillovers, Trade, Technological Capabilities

Acknowledgments

The comments and suggestions of two anonymous referees of the journal helped in reshaping the article. The authors are grateful to the referees and Professor Keun Lee for their encouragement with positive criticism and suggestions that resulted into substantive improvements in the earlier draft of the paper. However, the errors and omissions if any that remain is the sole responsibility of the authors.

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