Reconsidering the Effects of Intranational and International R&D Spillovers on Productivity Growth: Firm-level Evidence from Japan

Author Name KIYOTA Kozo  (Yokohama National University / Faculty Fellow, RIETI)
Creation Date/NO. January 2006 06-E-001
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Surprisingly, nearly 70 percent of Japanese manufacturing firms do not invest in Research and Development (R&D). Using firm-level longitudinal data in Japan, this paper asks why many firms can achieve high productivity growth without any R&D investments. We found the positive effects of intranational and international R&D spillovers on productivity growth both at the firm level (between a parent firm and its affiliate) and the industry level (among firms in the same industry). The effects of international R&D spillovers are much stronger than those of intranational spillovers. Even firms in developed countries like Japan have benefit from international R&D spillovers.