Abstract: International R&D spillovers is one of the important paths to achieve technological progress for developing countries. This paper applies space technical model which can illustrate the time change of relations of economic variables, to calculate direct and indirect international R&D spillovers stock through service trade import in China, and then uses cointegration and state space model to examine the effects of domestic and foreign R&D stock on growth of TFP in China. The empirical results show that in the long run, domestic R&D investment, international R&D spillovers and TFP stay in a stable relations of equilibrium cointegration, however effects of international indirect spillover is greater than direct one, and the relations of cointegration exhibited relatively large fluctuations owing to impacts from political and economic factors.

Key words: service import, international spillovers, cointegration, state space model