This paper examines the extent to which developing countries benefit from R&D conducted in industrial countries. The authors use a sample of 77 developing countries over the period 1971-1990 to estimate the impact of R&D spillovers from industrial countries on developing countries' productivity. They find that developing countries can boost their productivity by importing a wider variety of intermediate products and capital equipment embodying foreign knowledge, and by acquiring useful information. The empirical results suggest that R&D spillovers from industrial countries to developing countries are substantial. The estimated elasticities indicate that a developing country's total factor productivity is higher the greater its foreign R&D capital stock, the more open it is to trade with industrial countries, and the more educated its labor force. The paper also finds that a developing country's productivity is higher when its trade is more biased towards industrial countries with large cumulative R&D experiences. The estimated rates of return suggest that an increase in the domestic R&D capital stock of an industrial country can significantly boost the real GDP of developing countries. For example, an additional 100 USD in the U.S. domestic R&D capital stock can increase the aggregate GDP of the 77 developing countries by 22 USD. The paper concludes that R&D spillovers from industrial countries to developing countries are substantial and have significant economic implications.This paper examines the extent to which developing countries benefit from R&D conducted in industrial countries. The authors use a sample of 77 developing countries over the period 1971-1990 to estimate the impact of R&D spillovers from industrial countries on developing countries' productivity. They find that developing countries can boost their productivity by importing a wider variety of intermediate products and capital equipment embodying foreign knowledge, and by acquiring useful information. The empirical results suggest that R&D spillovers from industrial countries to developing countries are substantial. The estimated elasticities indicate that a developing country's total factor productivity is higher the greater its foreign R&D capital stock, the more open it is to trade with industrial countries, and the more educated its labor force. The paper also finds that a developing country's productivity is higher when its trade is more biased towards industrial countries with large cumulative R&D experiences. The estimated rates of return suggest that an increase in the domestic R&D capital stock of an industrial country can significantly boost the real GDP of developing countries. For example, an additional 100 USD in the U.S. domestic R&D capital stock can increase the aggregate GDP of the 77 developing countries by 22 USD. The paper concludes that R&D spillovers from industrial countries to developing countries are substantial and have significant economic implications.