Foreign Direct Investment and the Nature of R&D
AbstractThe authors find that the role foreign direct investment (FDI) plays in international technology transfer (ITT) hinges on whether substitute channels of ITT--such as imitation--exist for the host country. If FDI is the sole channel of ITT, a faster flow of FDI to the South increases the rates of innovation, imitation, and ITT, so FDI generates dynamic benefits. If FDI and imitation coexist as channels of ITT, however, then FDI merely substitutes for imitation targeting Northern firms. A faster flow of FDI to the South then leaves the rates of innovation, imitation, and ITT essentially unaffected, so FDI generates mostly static benefits.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 32 (1999)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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