What's a spillover?

We had an assignment to write about our research in "understandable form". I already submitted my explanation (and I just spotted one unfinished sentence) so here is a part of it. I hope it makes sense to You. If not, I need to improve. 

"Never thought about where all the frontier knowledge really come from? Yes, we have that research and development units that push the knowledge frontier forward. Yet, not all new knowledge to us is new to everyone else. When companies trade with each other, they learn from the others competences and organizational systems; this is called an economic spillover effect. Sometimes, they learn how the middle product should be developed to generate more value to their customer company. Sometimes, they see good or bad habits of the management those they self can employ or avoid. So, no wonder our estimations of knowledge in economic growth are lacking.

Researchers are making the fix with spillover effect. However, the channel and direction of the spillover effect are still unclear: Some argue that the spillover comes from imports only, other say that exports matter as much as imports. Additionally, the spillover of research and development is mostly favored subject of interest. Although, it is intuitively justifiable that the good practices travel more across country borders than the newly developed high technology."

My first paper is about the intangible asset (like organizational capital and R&D) spillover effect. I'll keep you posted.


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