This paper examines the impact of domestic and foreign R&D capital stocks on total factor productivity (TFP) across 22 countries from 1970 to 1990. It finds that both domestic and foreign R&D capital stocks significantly affect TFP, with foreign R&D having a particularly strong effect on smaller countries. The study shows that about a quarter of the worldwide benefits of R&D investment in the seven largest economies are appropriated by their trade partners. The paper uses a cointegration approach to estimate the long-run relationship between TFP and R&D capital stocks, finding that the elasticity of TFP with respect to R&D capital stocks is substantial. The results indicate that foreign R&D has a larger impact on TFP in smaller, more open economies. The study also highlights the importance of international trade and R&D spillovers in explaining productivity growth. The findings suggest that R&D investment has high returns, both domestically and internationally, with the global return on R&D investment in the G7 countries being significantly higher than in smaller countries. The paper concludes that international R&D spillovers are significant and that further research is needed to better understand the dynamics of R&D capital stocks and their impact on productivity.This paper examines the impact of domestic and foreign R&D capital stocks on total factor productivity (TFP) across 22 countries from 1970 to 1990. It finds that both domestic and foreign R&D capital stocks significantly affect TFP, with foreign R&D having a particularly strong effect on smaller countries. The study shows that about a quarter of the worldwide benefits of R&D investment in the seven largest economies are appropriated by their trade partners. The paper uses a cointegration approach to estimate the long-run relationship between TFP and R&D capital stocks, finding that the elasticity of TFP with respect to R&D capital stocks is substantial. The results indicate that foreign R&D has a larger impact on TFP in smaller, more open economies. The study also highlights the importance of international trade and R&D spillovers in explaining productivity growth. The findings suggest that R&D investment has high returns, both domestically and internationally, with the global return on R&D investment in the G7 countries being significantly higher than in smaller countries. The paper concludes that international R&D spillovers are significant and that further research is needed to better understand the dynamics of R&D capital stocks and their impact on productivity.