Inventing Together: Exploring the Nature of International Knowledge Spillovers in Latin America

This paper studies the nature, sources and determinants of international patenting activity in Latin American countries (LACs) and examines the extent to which LACs benefit from R&D that is performed in the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). By using patents and patent citations from the United States Patent and Trademark Office, we trace sectoral knowledge flows from G-5 countries to LACs. We study the impact of three channels of knowledge flows: foreign R&D, patent citation-related spillovers, and face-to-face contact spillovers. Our results, based on data for Argentina, Brazil, Chile, Colombia and Mexico, suggest that international knowledge spillovers from the G-5 countries were a significant determinant of inventive activity during the period 1988–2003. We find that the stock of ideas produced in the USA has a strong impact on the international patenting activity of these countries. Moreover, controlling for USdriven R&D effects, bilateral patent citations and face-to-face relationships between inventors are both important additional mechanisms of knowledge transmission. Some of our results suggest that the latter mechanism is more important than the former.