IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Southern Innovation and Backward Knowledge Spillovers: A Dynamic FDI Model

  • Keith Maskus
  • YIN HE

We develop a model in which the proportion of Northern firms choosing to become multinationals is endogenous. In the benchmark model, Northern firms engage in innovation based on the local knowledge stock and learning-by-doing (LBD), and a share of these products is transferred to Southern production via FDI. An increase in Southern imitation limits the multinationalization rate. We extend the model to permit Southern innovation based on the amount of local knowledge and LBD. Because Southern firms have higher innovation costs, this generates inefficient specialization in both regions and reduces global growth. However, it generates a U-shaped relationship between FDI and local imitation. We also allow for “backward” spillovers in knowledge to Northern innovation, which partially restores global efficiency and growth. We find that Southern R&D investments follow an inverse U-shape as imitation risk rises. A fall in fixed FDI setup costs or a rise in the LBD spillover in either region raises innovation growth.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://degit.sam.sdu.dk/papers/degit_14/c014_001.pdf
Download Restriction: no

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c014_001.

as
in new window

Length: 41 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:deg:conpap:c014_001
Contact details of provider: Postal: Niels Bohrs Vej 9, 6700 Esbjerg
Phone: +45 6550 2233
Fax: +45 6550 1090
Web page: http://degit.sam.sdu.dk/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Cooper, Russell & Johri, Alok, 2002. "Learning-by-doing and aggregate fluctuations," Journal of Monetary Economics, Elsevier, vol. 49(8), pages 1539-1566, November.
  2. Glass, Amy Jocelyn & Saggi, Kamal, 2002. "Intellectual property rights and foreign direct investment," Journal of International Economics, Elsevier, vol. 56(2), pages 387-410, March.
  3. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:deg:conpap:c014_001. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Pedersen)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.