Embodied and disembodied R&D spillovers to developed and developing countries

This paper examines R&D spillovers from G7 countries to other developed and developing countries. We find that knowledge diffusion to developed countries dominates developing countries through both trade and international telephone traffic. However, there is no significant differing effect for R&D spillovers through FDI. Overall, the impact of knowledge spillovers through FDI is smaller than that through trade and information technology.