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. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Multiple finances, margins of foreign direct investment and aggregate industry productivity

“…Although the question of whether FDI benefits its host country in productivity through technology spillover to domestic firms is widely discussed (Aitken and Harrison, 1999;Bitzer and Görg, 2005;Haskel et al, 2002;Javorcik, 2004;Keller and Yeaple, 2003), the impact of FDI on the parent country is rarely considered. In contrast to Pottelsberghel and Lichtenberg (2001), who present evidence that a country gains from outward FDI through technology sourcing, we show that FDI could bring aggregate productivity gains for the parent country through the reallocation of financial resources towards more productive firms. The tougher competition in the bond market induced by large FDI financing demand selects the least productive firms out of production and enhances aggregate productivity.…”

A new industry creation and originality: Insight from the funding sources of university patents

“…Some industries have seen important improvements related to university research, such as drug (Toole 2007) and pharmaceutical industry innovation contributing to lower hospital cost and increased life expectancy (Lichtenberg 2001(Lichtenberg , 2003. Other industries, such as biotechnology in the US, have been shaped in large part by university research (see Czarnitzki et al 2011;Zucker andDarby 1997 and.…”

Firm ownership, industrial structure, and regional innovation performance in China's provinces

“…Second, the new products and services brought by FIEs also provides opportunities for domestic firms to improve their technological levels via learning and imitation (Potterie & Lichtenberg, 2001;Serapio & Dalton, 1999). Third, labor transfers from FIEs to local owned enterprises (LOEs) may enable the transfer of tacit knowledge as employees in FIEs are usually highly trained (Breschi & Lissoni, 2001).…”