Are North-South Technological Spillovers Substantial? A Dynamic Panel Data Model Estimation

This paper argues that actual technological spillovers are not substantial in developing countries because of the absence of an absorptive capacity. We carry out a panel data analysis in an attempt to gain insight into the specific aspects that enable economies to benefit from the backlog of existing knowledge. Our findings indicate that low productivity effects of human capital coupled with weak or virtually inexistent systems of innovation are at the root of the observed ambiguity with regard to the spillovers gains that are expected to play a significant role in sparking growth.