R&D spillovers and productivity growth: evidence from Italian manufacturing microdata

Recently the focus of R&D impact on productivity moves from internal to external innovation. This paper assesses the link between R&D spillovers and productivity of 1017 Italian manufacturing firms over 1995-2000. Different proxies of R&D spillovers and several specification tests are used to select a well-behaved fixed effect model. As predicted by various new growth theory models, external R&D exerts a positive and highly significant effect on firms' productivity growth.