Trade, Patents and International Technology Diffusion

This paper investigates international technology diffusion through trade and patenting in a sample of 48 countries for the period 1980 – 2000. We divide the sample in three income groups to detect different patterns of technology absorption. Our results show that rich countries benefit from domestic technology and foreign technology embodied in imported capital goods, middle-income countries enjoy technology spillovers from foreign patents and imported capital goods, and poor countries benefit mainly from foreign patents. We find that government policies on intellectual property rights protection and trade openness have large effects on foreign technology spillovers in middle- and low-income countries.