With ever increasing global integration, productivity improvements depend not only on in-house innovative efforts, but on those of international partners as well. This paper explores the impact of foreign R&D on productivity and technical efficiency of countries by considering three major channels of embodied and disembodied spillovers, namely trade, foreign direct investment and patenting, and controlling for direct licensing of foreign technologies. Furthermore, it contrasts these effects across 47 developed and transition countries between 1990 and 2009. Overall, I find that trade remains the dominant factor behind productivity and technical progress, while the effects of FDI- and patent-related spillovers are significantly smaller. The effect of foreign patenting is larger in developed nations while imports, inward FDI and foreign technology licensing are important sources of know-how for transition economies. The aggregate gains from spillovers appear larger for latter, confirming their significance in the process of development and catching-up.
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