What determines technology diffusion across frontiers? R&D content, human capital and institutions

Abstract

This paper examines the determinants of international technology diffusion across a sample of 127 countries for the period 1961-2011. We measure technology diffusion by the importation of two capital goods categories that embody different R&D content: computers and metalworking machinery. We find that economic institutions and political institutions have a large and significant effect on computer imports (that embody a higher R&D content) but not for less technologically-intensive types of capital goods such as metalworking machinery. The role of institutions is mirrored by that of human capital. Together, these results highlight the role of institutions and human capital in facilitating embodied technology diffusion through capital goods imports, more than mere capital accumulation.