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International Business Travel: An Engine of Innovation?

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  • Nune Hovhannisyan
  • Wolfgang Keller

Abstract

While it is well known that managers prefer in-person meetings for negotiating deals and selling their products, face-to-face communication may be particularly important for the transfer of technology because technology is best explained and demonstrated in person. This paper studies the role of short-term cross-border labor movements for innovation by estimating the recent impact of U.S. business travel to foreign countries on their patenting rates. Business travel is shown to have a signi...cant e¤ect up and beyond technology transfer through the channels of international trade and foreign direct investment. On average, a 10% increase in business travel leads to an increase in patenting by about 0.2%, and inward business travel is about one fourth as potent for innovation as domestic R&D spending. We show that the technological knowledge of each business traveler matters by estimating a higher impact for travelers that originate in U.S. states with substantial innovation, such as California. This study provides initial evidence that international air travel may be an important channel through which cross-country income di¤erences can be reduced.

Suggested Citation

  • Nune Hovhannisyan & Wolfgang Keller, 2011. "International Business Travel: An Engine of Innovation?," NBER Working Papers 17100, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17100 Note: EFG ITI LS PR
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    Cited by:

    1. Ines Lindner & Holger Strulik, 2017. "Innovation and Inequality in a Small World," Tinbergen Institute Discussion Papers 17-057/II, Tinbergen Institute.
    2. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2016. "Global Talent Flows," Journal of Economic Perspectives, American Economic Association, pages 83-106.
    3. Sari Pekkala Kerr & William R. Kerr, 2015. "Global Collaborative Patents," NBER Working Papers 21735, National Bureau of Economic Research, Inc.
    4. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, Elsevier.
    5. Piva, Mariacristina & Tani, Massimiliano & Vivarelli, Marco, 2017. "The Productivity Impact of Business Mobility: International Evidence," GLO Discussion Paper Series 14, Global Labor Organization (GLO).
    6. Bruce A. Blonigen & Anca D. Cristea, 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," NBER Working Papers 18278, National Bureau of Economic Research, Inc.
    7. Li, Yao Amber, 2014. "Borders and distance in knowledge spillovers: Dying over time or dying with age?—Evidence from patent citations," European Economic Review, Elsevier, vol. 71(C), pages 152-172.
    8. repec:anr:reveco:v:9:y:2017:p:201-234 is not listed on IDEAS
    9. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2017. "High-Skilled Migration and Agglomeration," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 201-234, September.
    10. Cristea, Anca D., 2011. "Buyer-seller relationships in international trade: Evidence from U.S. States' exports and business-class travel," Journal of International Economics, Elsevier, vol. 84(2), pages 207-220, July.
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    12. repec:bof:bofrdp:urn:nbn:fi:bof-201512111472 is not listed on IDEAS
    13. Norasingh, Xaysomphet & Machikita, Tomohiro & Ueki, Yasushi, 2015. "South-South technology transfer to Laos through face-to-face contacts," Journal of Business Research, Elsevier, vol. 68(7), pages 1420-1425.
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    19. Christiane Hellmanzik, 2013. "Does travel inspire? Evidence from the superstars of modern art," Empirical Economics, Springer, vol. 45(1), pages 281-303, August.
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    More about this item

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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