How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing

Griffith, Rachel; Harrison, Rupert; Van Reenen, John

doi:10.1257/aer.96.5.1859

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American Economic Review: Vol. 96 No. 5 (December 2006)

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How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing

Article Citation

Griffith, Rachel, Rupert Harrison, and John Van Reenen. 2006. "How Special Is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing." American Economic Review, 96(5): 1859-1875.

DOI: 10.1257/aer.96.5.1859

Abstract

We examine the "technology sourcing" hypothesis that foreign research labs located in the U.S. tap into U.S. R&D spillovers and improve home country productivity. We show that U.K. firms that established a high proportion of inventors based in the U.S. by 1990 benefited disproportionately from the growth of U.S. R&D stock over the next ten years. We estimate that U.S. R&D during the 1990s was associated with 5 percent higher Total Factor Productivity for U.K. manufacturing firms in 2000 (about $13 billion), with the majority of benefits accruing to firms with an innovative presence in the U.S. (JEL F23, O32, O33)

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Authors

Griffith, Rachel
Harrison, Rupert
Van Reenen, John