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International Trade, Foreign Direct Investment, and Technology Spillovers

In: Handbook of the Economics of Innovation

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  • Keller, Wolfgang

Abstract

This chapter examines how international flows of technological knowledge affect economic performance across industries and firms across different countries. Motivated by the large share of the world's technology investments made by firms that are active across country borders, we focus on international trade and multinational enterprise activity as conduits for technological externalities, or spillovers. In addition to a review of recent empirical research on technology spillovers through trade and foreign direct investment, the discussion guided by a model of foreign direct investment, trade, and endogenous technology transfer. There is evidence for technology spillovers from both international trade and the activity of multinational enterprises. The analysis highlights challenges for future empirical research, as well as the need for additional data on technology and innovation.

Suggested Citation

  • Keller, Wolfgang, 2010. "International Trade, Foreign Direct Investment, and Technology Spillovers," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 793-829, Elsevier.
    • Handle: RePEc:eee:haechp:v2_793
    DOI: 10.1016/S0169-7218(10)02003-4
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    More about this item

    Keywords

    absorptive capacity; exports; gravity; horizontal foreign direct investment; imports; learning-by-exporting; multinational affiliates; multinational parents; patents; research and development expenditures; tacit knowledge; technology diffusion; technology transfer; vertical foreign direct investment;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • F2 - International Economics - - International Factor Movements and International Business
    • F1 - International Economics - - Trade
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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