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Teaching locals new tricks: Foreign experts as a channel of knowledge transfers

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  • Markusen, James R.
  • Trofimenko, Natalia

Abstract

Gains from productivity and knowledge transmission arising from the presence of foreign firms have received a good deal of empirical attention, but theoretical micro-foundations for this mechanism are limited. Here we develop a model in which foreign experts may train domestic workers who work with them. Hypotheses are generated under the assumptions that workers learn from experts (the effect of using an expert is not strictly temporary) and that this learning is embodied in the workers rather than in the firm. We use fixed effects and nearest neighbor matching estimators on a panel of plant-level data for Colombia that identifies the use of foreign experts, to show that these experts have substantial and persistent positive effects (though not always immediate) on the wages of domestic workers and on the value added per worker.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 88 (2009)
Issue (Month): 1 (January)
Pages: 120-131

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Handle: RePEc:eee:deveco:v:88:y:2009:i:1:p:120-131
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

Keywords: F4 O19 O47 Productivity Transmission mechanism Learning Spillovers Foreign experts;

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Find related papers by JEL classification:
  • F10 - International Economics - - Trade - - - General
  • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
  • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
  • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
  • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

References listed on IDEAS
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  17. Cahuc, Pierre & Gianella, Christian & Goux, Dominique & Zylberberg, Andre, 2002. "Equalizing Wage Differences and Bargaining Power: Evidence from a Panel of French Firms," CEPR Discussion Papers 3510, C.E.P.R. Discussion Papers.
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