International Economics and Economic Policy

, Volume 12, Issue 2, pp 221–237 | Cite as

Trade in ideas: outsourcing and knowledge spillovers

Original Paper


Inspired by the theory of variety-expanding product innovation we derive a testable relationship of outsourcing on the growth rate of knowledge. We estimate this relationship with a firm-level dataset, which is a unique match of PATSTAT patent data and the Amadeus dataset. We find evidence that forward spillovers are stronger than backward spillovers, where forward spillovers are defined as spillovers going down the value chain from producers to users of intermediate inputs. Moreover, we conclude that inter-industry spillovers are stronger than intra-industry spillovers. This holds when considering only the more important forward spillovers as well as when considering both directions of knowledge flows.


Outsourcing Knowledge spillovers Patents 

JEL Classification

C21 F14 O30 O52 



We thank an anonymous referee for helpful comments.We gratefully acknowledge funding from the Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology under project “Innovationsspillovers in Deutschland”. Sebastian Benz also gratefully acknowledges financial support from a DAAD PhD research grant. Peter Eppinger provided excellent research assistance.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Ifo Institute - Leibniz Institute for Economic Research at the University of MunichMünchenGermany
  2. 2.University of BayreuthBayreuthGermany
  3. 3.CESifoBayreuthGermany
  4. 4.GEP at University of NottinghamBayreuthGermany

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