Three essays on international trade and technology spillovers

This dissertation studies technology spillovers between countries. The dissertation consists of three chapters. The first chapter is a theoretical model that studies the impact of tarifs in the presence of R&D spillovers. The second chapter is an empirical model on the impact of spillovers through trade on productivity. The third chapter is also an empirical model on the determinants of foreign patents in a country. In the first chapter, we study the impact of tarifs on R&D expenditures when there are R&D spillovers between firms. The firms are located in the home and foreign countries and compete in the home country's market. We consider a three-stage game, where the government determines the amount of the tariff in the first stage, firms choose their R&D expenditures in the second stage, and outputs are determined in the third stage based on Cournot competition. We show that if the foreign government gives an R&D subsidy to the foreign firm, foreign R&D will increase and the domestic firm's profit and domestic welfare will decrease. However, domestic consumer surplus will increase. The home country can recover this profit and welfare loss, partially or totally, if it uses two policy instruments simultaneously: a tariff and an R&D subsidy. The second chapter studies the impacts of domestic and international technology spillovers on the growth rate of Canadian manufacturing industries. In this chapter, we examine whether different types of industries have different technology spillover rates. To test these hypotheses, Canadian industries are categorized into three groups based on their characteristics as low-tech, medium-tech, and high-tech. According to the empirical results, only foreign R&D has a positive and significant impact on productivity. Domestic R&D is not significant under any of the specifications; however, it helps industries absorb foreign R&D. The third chapter estimates the diffusion rate of foreign technology into Canadian industries at the industry level by using patent data. The results of this chapter suggest that the patent activity of foreign countries is the most important factor for receiving foreign patents in Canada. Moreover, imports and foreign direct investments are important vehicles for technology transfer. The distance between countries has a negative impact on receiving foreign patents. The impacts of R&D intensity and human capital on receiving foreign patents are mixed and insignificant, but industries with a higher R&D intensity may be better recipients of foreign patents