The Review of Economics and Statistics Vol. 83 No. 3 2001
Does Foreign Direct Investment Transfer Technology Across Borders?
Abstract
Previous studies have found that importing goods from R&D-intensive countries raises a country's productivity. In this paper, we investigate econometrically whether foreign direct investment (FDI) also transfers technology across borders. The data indicates that FDI transfers technology, but only in one direction: a country's productivity is increased if it invests in R&D-intensive foreign countries—particularly in recent years—but not if foreign R&D-intensive countries invest in it. Other findings of the paper are that the ratio of foreign-R&D benefits conveyed by outward FDI to foreign R&D benefits conveyed by imports is higher for large countries than it is for small ones, that failure to account for international R&D spillovers leads to upwardly biased estimates of the output elasticity of the domestic R&D capital stock, and that there are much larger transfers of technology from the United States to Japan than there are from Japan to the United States.
- DOI
- 10.1162/00346530152480135
- Volume
- 83
- Issue
- 3
- Pages
- 490-497
- Language
- en
- Sources
- openalex crossref