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Is Foreign Direct Investment a Channel of Knowledge Spillovers? Evidence from Japan's FDI in the United States

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  • Lee Branstetter
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    Abstract

    Recent empirical work has examined the extent to which international trade fosters international spillovers' of technological information. FDI is an alternate, potentially equally important channel for the mediation of such knowledge spillovers. I introduce a framework for measuring international knowledge spillovers at the firm level, and I use this framework to directly test the hypothesis that FDI is a channel of knowledge spillovers for Japanese multinationals undertaking direct investments in the United States. Using an original firm-level data set on Japanese firms' FDI and innovative activity find evidence that FDI increases the flow of knowledge spillovers both from and to the investing Japanese firms.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8015.

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    Date of creation: Nov 2000
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    Publication status: published as Branstetter, Lee. "Is Foreign Direct Investment A Channel Of Knowledge Spillovers? Evidence From Japan's FDI In The United States," Journal of International Economics, 2006, v68(2,Mar), 325-344.
    Handle: RePEc:nbr:nberwo:8015

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