American Economic Review: Vol. 92 No. 1 (March 2002)
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Geographic Localization of International Technology Diffusion
Keller, Wolfgang. 2002. "Geographic Localization of International Technology Diffusion ." American Economic Review, 92(1): 120-142.
Income convergence across countries turns on whether technological knowledge spillovers are global or local. I estimate the amount of spillovers from R&D expenditures on a geographic basis, using a new data set which encompasses most of the world's innovative activity between 1970 and 1995. I find that technology is to a substantial degree local, not global, as the benefits from spillovers are declining with distance. The distance at which the amount of spillovers is halved is about 1,200 kilometers. I also find that over time, technological knowledge has become considerably more global. Moreover, language skills are important for spillover diffusion. (JEL F0, O1, O3)
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Keller, Wolfgang (Department of Economics, University of Texas, Austin, TX 78712, US)