Do Deep Regional Trade Agreements Enhance International Technology Spillovers? Depth, Breadth, and Heterogeneity

In Chap. 10.1007/978-981-16-5210-3_5, we examine the relationship between bilateral trade patterns and international technology spillovers. In Chap. 10.1007/978-981-16-5210-3_6, we analyze how horizontal and vertical foreign direct investment (FDI) of multinational enterprises (MNEs) affects technology spillovers between themselves and firms in host countries. Both chapters analyze the issues from theoretical and empirical points of view. Each chapter shows that international trade or FDI is an important channel of international technology spillovers, but the effect on them is heterogeneous, depending on the type of trade patterns or the structure of FDI. In both chapters we measure technology spillovers using patent citation data.

Trade Patterns and International Technology Spillovers: Theory and Evidence from Japanese and European Patent Citations

International diffusion of knowledge is important to both the speed of the world’s technology frontier expansion and income convergence across countries. For example, Eaton and Kortum (1996) estimate innovation and technology diffusion among 19 Organization for Economic Co-operation and Development (OECD) countries to test predictions from a quality ladders model of endogenous growth with patenting.

Vertical Versus Horizontal Foreign Direct Investment and Technology Spillovers

Foreign direct investment (FDI) and international trade are two major channels of international diffusion of technological knowledge (Keller 2004,2010). While a number of empirical studies confirm significant spillover effects of knowledge through imports, the empirical findings on technology spillover effects through FDI are conflicting. In particular, there is relatively little evidence of spillovers of knowledge from inward FDI to the host country’s firms in the same industry. For example, Haskel et al. (2007) examine the situation in the United Kingdom and find significantly positive productivity spillovers from FDI.

Technology Spillovers and Its Mechanisms of Diffusion in Emerging Market Economies: Issues and Challenges

This article examines the empirical literature on technology spillovers and the mechanisms or channels through which it diffuses in emerging market economies. This article delves into conceptual and measurement challenges concerning technology spillovers. International trade, foreign direct investment, and human capital are the main mechanisms or channels through which technology spillovers and diffusion takes place. In so doing, limitations are also brought out concerning measurement and methodological issues. Finally, this article summarizes the issues and challenges with regards to technology spillovers and its mechanisms of diffusion in emerging market economies and provides pointers for future research.