Quarterly Journal of Economics Vol. 124 No. 1 2009
Foreign Know-How, Firm Control, and the Income of Developing Countries*
Abstract
Management know-how shapes the productivity of firms and can be reallocated across countries as managers acquire control of factors of production abroad. We construct a quantitative model to investigate the aggregate consequences of the international reallocation of management know-how. Using aggregate data, we infer the relative scarcity of this form of know-how in a sample of developing countries. We find that developing countries gain, on average, 12% in output and 5% in welfare (with wide variation across countries) when they eliminate policy barriers to foreign control of domestic factors of production.
- DOI
- 10.1162/qjec.2009.124.1.149
- Volume
- 124
- Issue
- 1
- Pages
- 149-195
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib