The internationalization of agricultural technology: Patents, R&D spillovers, and their effects on productivity in the European Union and United States

Multilateral indices of total factor productivity (TFP) allow efficiency co mparisons between ten European Union countries and the United States from 1 973 to 1993. Differences in TFP levels are then explained by land quality d ifferences, public research and development (R&D) expenditures, education l evels, private-sector patents, international spillovers of public R&D, and private-sector technology transfer. There is evidence that public R&D resul ts in limited knowledge spillovers between the European countries and the U nited Stares. However, the use of international patent data from the Yale T echnology Concordance shows not only that patents matter, but also that pri vate sector technology transfer may be the dominant force in explaining TFP trends. The United States and the European Union countries with more advan ced research systems (Netherlands, Denmark, France, and Belgium) converge i n a high-growth club, while Germany, Luxembourg, Greece, Italy, Ireland, an d the United Kingdom form the slow-growth group. Ignoring knowledge spillov ers and technology transfer leads to biased estimates of R&D elasticities, which is hardly surprising since the private sector is now spending more th an the public in some of these countries. Thus, the estimated rate of retur n to public agricultural R&D falls from over 60% in the closed economy mode l to 10% in the model that takes account of international spillovers. (JEL Q16).