Innovation, international R&D Spillovers and the sectoral heterogeneity of knowledge flows.

This paper analyses the relative effects of national and international, intra-sectoral and intersectoral spillovers on innovative activity in six large, industrialized countries (France, Germany, Italy, Japan, UK and US) over the period 1981-1995. We use patent applications at the European Patent Office to measure innovation and their citations to trace knowledge flows within and across 135 narrowly defined technological fields. We find that, in addition to international ones, intra-sectoral spillovers are an important determinant of innovation.