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International Trade, Foreign Direct Investment, and Technology Spillovers

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  • Keller, Wolfgang

Abstract

This paper examines how international flows of technological knowledge affect economic performance across industries and firms in different countries. Motivated by the large share of the world's technology investments made by firms that are active across borders, we focus on international trade and multinational enterprise activity as conduits for technological externalities, or spillovers. In addition to reviewing the recent empirical research on technology spillovers, the discussion is guided by a new model of foreign direct investment, trade, and endogenous technology transfer. We find evidence for technology spillovers through international trade and the activity of multinational enterprises. The analysis also highlights challenges for future empirical research, as well as the need for additional data on technology and innovation.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7503.

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Date of creation: Oct 2009
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Handle: RePEc:cpr:ceprdp:7503

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Keywords: Intra-firm trade; Learning-by-exporting; Multinational firms; Tacit knowledge; Technological externalities; Technology diffusion; Total factor productivity;

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Citations

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Cited by:
  1. Paz, Lourenco, 2012. "Trade liberalization and inter-industry productivity spillovers: an analysis of the 1989-1998 Brazilian trade liberalization episode," MPRA Paper 38859, University Library of Munich, Germany.
  2. Fabio MONTOBBIO (University of Turin & KITES, Bocconi University, Milan) & Valerio STERZI (GREThA, CNRS, UMR 5113 & KITES, Bocconi University, Milan), 2012. "The globalization of technology in emerging markets: a gravity model on the determinants of international patent collaborations," Cahiers du GREThA 2012-05, Groupe de Recherche en Economie Théorique et Appliquée.
  3. Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
  4. repec:got:cegedp:140 is not listed on IDEAS
  5. Keller, Wolfgang & Yeaple, Stephen R, 2009. "Gravity in the Weightless Economy," CEPR Discussion Papers 7553, C.E.P.R. Discussion Papers.
  6. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
  7. Mora, Jesse & Singh, Nirvikar, 2012. "Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience," MPRA Paper 37127, University Library of Munich, Germany.
  8. Wolfgang Keller & Stephen R. Yeaple, 2009. "The Gravity of Knowledge," NBER Working Papers 15509, National Bureau of Economic Research, Inc.
  9. JINJI Naoto & ZHANG Xingyuan & HARUNA Shoji, 2011. "Does the Structure of Multinational Enterprises' Activity Affect Technology Spillovers?," Discussion papers 11027, Research Institute of Economy, Trade and Industry (RIETI).
  10. Gehringer, Agnieszka, 2013. "Financial liberalization, financial development and productivity growth: An overview," Economics Discussion Papers 2013-46, Kiel Institute for the World Economy.
  11. Yeh, Kuo-chun & Ho, Tai-kuang, 2012. "Magnitude and volatility of Taiwan's net foreign assets against Mainland China: 1981–2009," China Economic Review, Elsevier, vol. 23(3), pages 720-728.
  12. Carluccio, Juan & Fally, Thibault, 2010. "Foreign Entry and Spillovers with Technological Incompatibilities in the Supply Chain," CEPR Discussion Papers 7866, C.E.P.R. Discussion Papers.
  13. Valeria Costantini & Paolo Liberati, 2011. "Technology transfer, institutions and development," Departmental Working Papers of Economics - University 'Roma Tre' 0135, Department of Economics - University Roma Tre.
  14. Holger Strulik & Klaus Prettner & Alexia Prskawetz, 2013. "The past and future of knowledge-based growth," Journal of Economic Growth, Springer, vol. 18(4), pages 411-437, December.
  15. Schmeiser, Katherine N., 2012. "Learning to export: Export growth and the destination decision of firms," Journal of International Economics, Elsevier, vol. 87(1), pages 89-97.

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