Journal Article

How special is the special relationship? Using the impact of US R&D spillovers on UK firms as a test of technology sourcing

Date: 01 December 2006
Publisher: American Economic Association
Published in: American Economic Review , No. 5, pp. 1859-1875
Dataset: Download dataset

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.