Empirical Evidence of Inter-Industry R&D Spillover in Japan

This article investigates the inter-industry spillover effect of R&D stock in Japanese manufacturing industries. A translog cost function model was constructed for ten Japanese manufacturing industries. Most of the tested parameters for industry R&D stock and R&D spillover were significant, demonstrating their contribution. R&D spillover reduced costs in all industries in most periods. The impact of R&D spillover on costs was strong in industries where the industry R&D stock is large.