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International R&D Transfer and Technical Efficiency: Evidence from Panel Study Using Stochastic Frontier Analysis

  • Wang, Miao
  • Wong, M. C. Sunny

We study the effect of foreign research and development (R&D) transferred through imports and foreign direct investment (FDI) on domestic technical efficiency using stochastic frontier analysis. Unbalanced panel results from a 77-country sample over 1986–2007 show that FDI- and imports-transferred foreign R&D have a significant impact on domestic country’s technical efficiency. Furthermore, we observe a complementarity between FDI-transferred R&D and domestic human capital. In other words, the domestic country needs to obtain a threshold level of human capital to benefit from FDI-transferred R&D. Other macro conditions such as infrastructure, political stability, and urbanization also help to improve the technical efficiency of a country.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 10 ()
Pages: 1982-1998

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:10:p:1982-1998
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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