External knowledge is an important input for the innovation process of firms. Increasingly, this knowledge is likely to originate from outside of their national borders. This explains the preoccupation of policymakers with stimulating local technology transfers coming from international firms. We find that firms that have access to the international technology market are more likely to transfer technology to the local economy. In doing so, we qualify the traditional assertion that multinational firms are more likely to transfer technology to the local economy. Once controlled for the superior access to the international technology market that multinationals enjoy, we find that these firms are not more likely to transfer technology to the local economy compared to exporting or local firms that have access to the international technology market. In summary, the main result of this paper is that it is not so much the international character of the firms, but rather their access to the international technology market that is important for generating external knowledge transfers to the local economy.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2337.
Find related papers by JEL classification: D21 - Microeconomics - - Production and Organizations - - - Firm Behavior F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
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