Working Paper: CEPR ID: DP7503
Authors: Wolfgang Keller
Abstract: This paper examines how international flows of technological knowledge affect economic performance across industries and firms in different countries. Motivated by the large share of the world's technology investments made by firms that are active across borders, we focus on international trade and multinational enterprise activity as conduits for technological externalities, or spillovers. In addition to reviewing the recent empirical research on technology spillovers, the discussion is guided by a new model of foreign direct investment, trade, and endogenous technology transfer. We find evidence for technology spillovers through international trade and the activity of multinational enterprises. The analysis also highlights challenges for future empirical research, as well as the need for additional data on technology and innovation.
Keywords: intrafirm trade; learning-by-exporting; multinational firms; tacit knowledge; technological externalities; technology diffusion; total factor productivity
JEL Codes: F1; F2; O3; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| international trade (F19) | technology diffusion (O33) |
| imports (F14) | productivity (O49) |
| FDI (F23) | technology spillovers (O33) |
| multinational enterprises (F23) | knowledge transfer to local affiliates (O36) |
| local workers (J69) | transmit knowledge to domestic firms (O36) |
| geographic proximity (R12) | effectiveness of spillovers (O36) |
| technological complexity (O33) | effectiveness of spillovers (O36) |