Knowledge Spillovers through International Supply Chains

Abstract Using industry-level R&D and patent data for a sample of 29 countries for the period 2000-2008, we study the importance of international supply linkages for knowledge spillovers. We find a statistically significant effect of supply chains on international knowledge spillovers and show that knowledge spillovers increase with the intensity of supply chain linkages between countries. We also show that the evidence that knowledge spillovers flow along supply chains is more robust than the traditional finding that knowledge spillovers depend on geographical distance or trade flows. This finding supports policies that favour participation in supply chains to foster economic development