Template-type: ReDIF-Paper 1.0
Author-Name: Ziesemer, Thomas
Author-Email: ziesemer@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, Maastricht University
Title: Foreign R&D spillovers to the USA and strategic reactions
Abstract: We re-consider the traditional result of zero or negative foreign R&D
	 spillovers or strategic reactions to the USA using accumulated shocks in
	 a vector-error-correction model (VECM) for the period 1963-2017. Foreign
	 private and public R&D stocks have a positive and statistically
	 significant effect on US public R&D and labour-augmenting technical
	 change (LATC). US private R&D reacts positively to foreign private R&D
	 and negatively to foreign public R&D shocks. Foreign public and private
	 R&D react positively to US public R&D. All variables react positively to
	 US private R&D. From the time profile of the simulated VECM, we
	 calculate the sum of discounted (at 4%) net gains for (i) additional
	 private and public US R&D, and (ii) for policies reacting to foreign
	 private and public R&D shocks with additional domestic private and
	 public R&D. Additional private and public US R&D expenditures have very
	 high internal rates of return. R&D investments in reaction to shocks
	 from foreign R&D are profitable. All LATC reactions are transitional
	 suggesting semi-endogenous growth for the USA.
Classification-JEL: C51, O30, O38, O47, O51
Keywords: Growth, productivity, R&D, reaction functions, spillovers, CVAR
Series: UNU-MERIT Working Papers
Creation-Date: 20210326
Number: 2021-015
File-URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-015.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2021015