Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners

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In this paper, I analyze recent findings by Coe and Helpman (1995) on trade-related international R&D spillovers. A Monte Carlo based robustness test is proposed which compares the elasticity of domestic productivity with respect to foreign R&D estimated by Coe and Helpman with an elasticity which is based on counterfactual international trade patterns. I show that also these randomly created trade patterns give rise to positive international R&D spillover estimates, which are larger and explain more of the variation in productivity across countries than if true' bilateral trade patterns are employed. The finding casts doubt on the claim that patterns of international trade are important in driving R&D spillovers.

Published: Wolfgang Keller. "Are international R&D spillovers trade-related?: Analyzing spillovers among randomly matched trade partners," European Economic Review, 1998, vol. 42, issue 8, pages 1469-1481

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