Countries? A Patent Citation Analysis∗

The purpose of this paper is to assess empirically whether trade flows carry disembod-ied knowledge to emerging countries. Endogenous growth theory predicts that productiv-ity growth rates of countries are related through international trade linkages and associated embodied and disembodied knowledge spillovers. Patent statistics are an output indica-tor of innovation. This allow patent citations to reflect the process of knowledge diffusion. Combining an endogenous growth framework with a patent citation analysis, we evalu-ate whether more exporting or importing countries tend to cite more foreign patents, i.e. learn more from foreign technology. The empirical estimation concerns the relative num-ber of backward citations and bilateral trade flows between 18 emerging and 10 technology source countries, at a sectoral level, for the period of 1980-1998. We contribute to the pre-vious literature by taking into account several proximity measures and by distinguishing sector’s technological intensities. Our results show that trade transfers technology across countries and sectors, but the extent of the diffusion depends mainly on cultural and his-torical proximities and the level of technical capacity of host countries