Working Paper: CEPR ID: DP3765
Authors: Rachel Griffith; Stephen Redding; Helen Simpson
Abstract: This Paper investigates whether there is convergence in Total Factor Productivity towards the technological frontier at the establishment level. We find convergence to the frontier is statistically and quantitatively important, suggesting the existence of technology spillovers. Foreign multinationals make up a significant proportion of establishments at the technological frontier, and therefore make a contribution to productivity growth through technology transfer. We also find evidence that increased foreign presence within an industry raises the speed of convergence to the technological frontier.
Keywords: Competition; FDI; Knowledge Spillovers
JEL Codes: F23; O33; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Foreign ownership (F23) | TFP growth (O49) |
| Foreign presence (F29) | Speed of convergence to technological frontier (O47) |
| Foreign ownership (F23) | Technology transfer rates (F16) |
| Foreign-owned multinationals (F23) | Productivity growth (O49) |
| Increased foreign presence (F29) | Competition and innovation incentives for domestic firms (O31) |