Title: Assessing international knowledge spillovers from government funded R&D: evidence from Japanese national projects

Authors: Naoki Takada; Yaichi Aoshima; Kazunari Matsushima; Akira Izumi

Addresses: Graduate School of Business Administration, Hitotsubashi University, Naka 2-1, Kunitachi, Tokyo 186-8601, Japan ' Institute of Innovation Research, Hitotsubashi University, Naka 2-1, Kunitachi, Tokyo 186-8601, Japan ' School of Arts and Sciences, Tokyo Woman's Christian University, Zempukuji 2-6-1, Suginami, Tokyo 167-8585, Japan ' Center for Entrepreneurship Education, Institute of Science Tokyo, Ookayama 2-12-1, Meguro, Tokyo 152-8550, Japan

Abstract: This study investigates international knowledge spillovers arising from government-funded R&D projects (GFPs). While GFPs are often justified by their domestic benefits, their international effects remain less clear. We posit that GFPs amplify international spillovers by signalling technological promise: government selection legitimises priority fields and attracts foreign attention. Using patent data from Japanese GFPs and a matched sample of private R&D, we find that GFPs' patents receive significantly more international forward citations, especially when projects are highlighted in national budget plans. These results suggest that GFPs, though designed to enhance national competitiveness, simultaneously strengthen the global circulation of knowledge. The findings highlight the need for policy designs that balance openness with appropriation by enhancing absorptive capacity and incentivising follow-up innovation.

Keywords: government funded R&D project; GFPs; international knowledge spillover; innovation policy; national competitiveness; patent citations; signalling; attention; project selection; Japan.

DOI: 10.1504/IJTM.2025.151910

International Journal of Technology Management, 2025 Vol.99 No.1/2, pp.127 - 146

Received: 17 Mar 2025
Accepted: 15 Oct 2025
Published online: 25 Feb 2026 *

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