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Trade, Foreign Direct Investment, and R&D Spillovers

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  • Walid Hejazi

    (University of Toronto at Scarborough)

  • A Edward Safarian

    (University of Toronto)

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    Abstract

    Attempts to measure the spillover effects of multinational enterprises on host countries have generally been cross-sectional and limited to labour productivity in manufacturing for a single country. Recent work in growth theory has measured the extent to which growth in total factor productivity in a country depends not only on domestic R&D capital stocks but also on foreign R&D capital stocks. This paper extends such work by adding foreign direct investment stocks to foreign trade as a channel linking total factor productivity levels between countries. This is done by considering the role of trade and FDI as diffusion channels for G6 R&D to the OECD countries. There are three main results: the coefficient estimates for FDI are higher than those for trade in the standard model; the importance of the trade channel is much reduced once FDI is included; and the overall spillovers increase significantly with the inclusion of FDI.© 1999 JIBS. Journal of International Business Studies (1999) 30, 491–511

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 30 (1999)
    Issue (Month): 3 (September)
    Pages: 491-511

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    Handle: RePEc:pal:jintbs:v:30:y:1999:i:3:p:491-511

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    Cited by:
    1. Filatotchev, Igor & Liu, Xiaohui & Lu, Jiangyong & Wright, Mike, 2011. "Knowledge spillovers through human mobility across national borders: Evidence from Zhongguancun Science Park in China," Research Policy, Elsevier, vol. 40(3), pages 453-462, April.
    2. Ho, Kong Weng & Hoon, Hian Teck, 2009. "Growth accounting for a technology follower in a world of ideas: The case of Singapore," Journal of Asian Economics, Elsevier, vol. 20(2), pages 156-173, March.
    3. Richard Perkins & Eric Neumayer, 2009. "How do domestic attributes affect international spillovers of CO2-efficiency?," Grantham Research Institute on Climate Change and the Environment Working Papers 8, Grantham Research Institute on Climate Change and the Environment.
    4. Buscemi, Antonino & Yallwe, Alem Hagos, 2011. "Money laundry and financial development," MPRA Paper 32458, University Library of Munich, Germany.
    5. Spulber, Daniel F., 2008. "Innovation and international trade in technology," Journal of Economic Theory, Elsevier, vol. 138(1), pages 1-20, January.
    6. Leimbach, Marian & Edenhofer, Ottmar, 2007. "Technological spillovers within multi-region models: Intertemporal optimization beyond the Negishi approach," Economic Modelling, Elsevier, vol. 24(2), pages 272-294, March.
    7. Leimbach, Marian & Baumstark, Lavinia, 2010. "The impact of capital trade and technological spillovers on climate policies," Ecological Economics, Elsevier, vol. 69(12), pages 2341-2355, October.
    8. Sun, Qian & Tong, Wilson & Yu, Qiao, 2002. "Determinants of foreign direct investment across China," Journal of International Money and Finance, Elsevier, vol. 21(1), pages 79-113, February.
    9. Hübler, Michael, 2011. "Technology diffusion under contraction and convergence: A CGE analysis of China," Energy Economics, Elsevier, vol. 33(1), pages 131-142, January.
    10. Yasar, Mahmut & Paul, Catherine J. Morrison & Ward, Michael R., 2011. "Property Rights Institutions and Firm Performance: A Cross-Country Analysis," World Development, Elsevier, vol. 39(4), pages 648-661, April.
    11. Burns, Natasha & Liebenberg, Ivonne, 2011. "U.S. takeovers in foreign markets: Do they impact emerging and developed markets differently?," Journal of Corporate Finance, Elsevier, vol. 17(4), pages 1028-1046, September.
    12. Anwar, Sajid & Nguyen, Lan Phi, 2011. "Foreign direct investment and trade: The case of Vietnam," Research in International Business and Finance, Elsevier, vol. 25(1), pages 39-52, January.
    13. Bevan, Alan A. & Estrin, Saul, 2004. "The determinants of foreign direct investment into European transition economies," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 775-787, December.

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