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Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States

  • Wolfgang Keller

    (University of Colorado, National Bureau of Economic Research, and Center for Economic Policy Research)

  • Stephen R. Yeaple

    (University of Colorado and National Bureau of Economic Research)

We estimate international technology spillovers to U.S. manufacturing firms via imports and foreign direct investment (FDI) between 1987 and 1996. In contrast to earlier work, our results suggest that FDI leads to substantial productivity gains for domestic firms. The size of FDI spillovers is economically important, accounting for about 14% of productivity growth in U.S. firms between 1987 and 1996. FDI spillovers are particularly strong in high-tech sectors, whereas they are largely absent in low-tech sectors. Small firms with low productivity benefit more from FDI spillovers than larger productivity firms with more productivity do. The evidence for import spillovers is much weaker. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 91 (2009)
Issue (Month): 4 (November)
Pages: 821-831

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Handle: RePEc:tpr:restat:v:91:y:2009:i:4:p:821-831
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