Global Technology Transfer Driven by Research, Economic Growth and IP Laws

We describe the factors that affect international technology transfer through the level of R&D expenditure, economic development, and Intellectual Property Rights (IPR) protection. Analyzing a large and diverse sample from the World Bank Development Indicators, national statistics on R&D, and the Global Competitiveness Index, the paper uses a gravity model with time-exporter and time-importer fixed impacts to identify variations in technology transfer. Poisson Pseudo Maximum Likelihood (PPML) degeneration examines royalty payments, and an augmented model includes the IPR quality and technology intensity. We found out that export of technology increases with increase in both R&D spending and R&D productivity while import of technology is higher and more probable in large and less remote countries. The extended model increases the fit from 45% to 57% by the inclusion of IPR protection, and technology intensity. The findings of decomposition analysis reveal that R&D and GDP have a high sensitivity to developed countries while remoteness and GDP have high sensitivity to developing countries. With respect to technology transfer, the study demonstrates that there are adverse effects of weak IPR protection and geographical isolation, which is evidenced by the large gaps for nations like India, China, and Turkey. The implications of these results for technology transfer strategy and the improvement of international cooperation are discussed.