On indirect trade-related R&D spillovers: The “Average Propagation Length” of foreign R&D

The paper estimates the impact on Total Factor Productivity of trade-related R&D spillovers\r\nby accounting for the economic distance between countries. The Average Propagation\r\nLength foreign R&D covers to reach a domestic country is used in building the foreign\r\navailable R&D stock and to estimate its TFP impact vs. that of the domestic R&D stock. With\r\nrespect to 20 OECD countries in the period 1995–2005, the impact on TFP of the available\r\nforeign R&D stock is greater than that of the domestic one. Results support the models\r\nthat recognize indirect trade-related R&D spillovers and provide for them a more accurate\r\ninterpretation.