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International Business Travel: An Engine of Innovation?

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  • Nune Hovhannisyan
  • Wolfgang Keller

Abstract

While it is well known that managers prefer in-person meetings for negotiating deals and selling their products, face-to-face communication may be particularly important for the transfer of technology because technology is best explained and demonstrated in person. This paper studies the role of short-term cross-border labor movements for innovation by estimating the recent impact of U.S. business travel to foreign countries on their patenting rates. Business travel is shown to have a signi cant e¤ect up and beyond technology transfer through the channels of international trade and foreign direct investment. On average, a 10% increase in business travel leads to an increase in patenting by about 0.2%, and inward business travel is about one fourth as potent for innovation as domestic R&D spending. We show that the technological knowledge of each business traveler matters by estimating a higher impact for travelers that originate in U.S. states with substantial innovation, such as California. This study provides initial evidence that international air travel may be an important channel through which cross-country income di¤erences can be reduced.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17100.

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Date of creation: May 2011
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Handle: RePEc:nbr:nberwo:17100

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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. Cristea, Anca D., 2011. "Buyer-seller relationships in international trade: Evidence from U.S. States' exports and business-class travel," Journal of International Economics, Elsevier, vol. 84(2), pages 207-220, July.
  3. TANAKA Ayumu, 2013. "Geographic Concentration of Foreign Visitors to Japan," Discussion papers 13008, Research Institute of Economy, Trade and Industry (RIETI).
  4. Christiane Hellmanzik, 2013. "Does travel inspire? Evidence from the superstars of modern art," Empirical Economics, Springer, vol. 45(1), pages 281-303, August.
  5. 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.
  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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