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International Business Travel: An Engine of Innovation?

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  • Hovhannisyan, Nune
  • Keller, Wolfgang

Abstract

While business surveys often find that managers prefer face-to-face communication for negotiating deals and selling their product, there is reason to believe that face-to-face meetings are particularly important for the transfer of technology, because technology is best explained and demonstrated in person. This paper examines the role of inward business travelers in raising a country's rate of innovation by looking at business travel from the United States to seventy-four other countries during the years 1993-2003. We find that international business travel has a significant effect up and beyond technology transfer through international trade and foreign direct investment. A 10% increase in international business traveler arrivals leads on average to an increase in patenting of about 1%. There is also strong evidence that the impact on innovation depends on the quality of the technological knowledge carried by each business traveler. This study shows that international air travel may be an important channel through which cross-country income differences can be reduced. Our results on short-term cross-border labor migration raise also a number of new policy issues that are discussed.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7829.

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Date of creation: May 2010
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Handle: RePEc:cpr:ceprdp:7829

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Keywords: cross-border labor mobility; face-to-face communication; International technology transfer; patenting; tacit knowledge;

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References

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  1. Charles I. Jones, . "Sources of U.S. Economic Growth in a World of Ideas," Working Papers 98009, Stanford University, Department of Economics.
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Citations

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Cited by:
  1. Blonigen, Bruce A. & Cristea, Anca D., 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," MPRA Paper 40304, University Library of Munich, Germany.
  2. TANAKA Ayumu, 2013. "Geographic Concentration of Foreign Visitors to Japan," Discussion papers 13008, Research Institute of Economy, Trade and Industry (RIETI).
  3. Cristea, Anca D., 2011. "Buyer-Seller Relationships in International Trade: Evidence from U.S. States' Exports and Business-Class Travel," MPRA Paper 30347, University Library of Munich, Germany.
  4. Deltas, George & Karkalakos, Sotiris, 2013. "Similarity of R&D activities, physical proximity, and R&D spillovers," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 124-131.
  5. Christiane Hellmanzik, 2013. "Does travel inspire? Evidence from the superstars of modern art," Empirical Economics, Springer, vol. 45(1), pages 281-303, August.
  6. Ayumu Tanaka, 2013. "Geographic Concentration of Foreign Visitors to Japan," Discussion papers e-12-013, Graduate School of Economics Project Center, Kyoto University.

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