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International R&D Spillovers: An Application Of Estimation And Inference In Panel Cointegration, Chihwa Kao, Min-Hsien Chiang, Bangtian Chen
International R&D Spillovers: An Application Of Estimation And Inference In Panel Cointegration, Chihwa Kao, Min-Hsien Chiang, Bangtian Chen
Center for Policy Research
In this paper, we apply the asymptotic theory of panel cointegration developed by Kao and Chiang (1997) to Coe and Helpman's (1995) international R&D spillovers regression. The OLS with bias-correction, the fully-modified (FM) and the dynamic OLS (DOLS) estimations produce different predictions about the impact of foreign R&D on total factor productivity (TFP), although all the estimations support the result that domestic R&D is related to TFP.