R&D, innovation and knowledge spillovers: An empirical reappraisal based on cross sectional dependence

Bottazzi and Peri (2007) show that the existence of a cointegrating relationship between the domestic stock of knowledge, domestic R&D and the international knowledge stock can be interpreted as a support of the semi-endogenous versus the endogenous growth models. We replicate their study in a wide sense by using three more countries, a more recent time period, a different measure of R&D resources and by estimating the cointegrating vector with an econometric methodology that is robust to cross sectional dependence. Our replication confirms Bottazzi and Peri's main results in favour of the semi-endogenous growth models but finds stronger spillover effect