Heterogeneity of International Productivity Spillover Through the Channel of Import Flow

Abstract

This paper explores the heterogeneity of international productivity spillover by applying spatial production models with various weight matrices. Specifically, the direction and magnitude of productivity spillover through the channel of import flow is examined empirically by dividing the sample countries into three groups: the Group of 7 (G7), the G12 (the 12 countries that belong to the G20 but not the G7), and the non-G20 (the rest of the countries in our sample). The empirical findings are as follows: (i) international productivity spillovers are significantly heterogeneous, (ii) the G7 triggers productivity spillover but does not benefit from productivity spillover from the rest of the world, (iii) the non-G20 accommodates positive productivity spillover from the G20 countries, and (iv) the G12 does not trigger spillover toward G7 nor benefit from G7, whereas the G12 and the non-G20 have ambidirectional productivity spillover.

Keywords

• Productivity and competitiveness
• productivity spillover
• technology diffusion
• spatial model
• panel data