International knowledge spillovers and technology imports: Evidence from Japanese chemical and electric equipment industries

This paper clarifies the role of licensed technology imports by investigati ng data from over 200 Japanese firms in the chemical and electric equipment industries. The results from various estimation methods suggest that licen sed technology imports encourage licensees' innovation, since they enhance foreign knowledge inflow. Moreover, the size of this effect depends on the industry and on firm-specific characteristics such as the technological lev el. Technology imports tend to have the greatest impact when substitute dom estic knowledge is less developed than in foreign countries. The significan ce of technology imports also varies within each industry according to a fi rm's R&D capability. (C) 2001 Academic Press.