International Business Travel: An Engine of Innovation?

Abstract

While it is well known that managers prefer in-person meetings for negotiating deals and selling their products, face-to-face communication may be particularly important for the transfer of technology because technology is best explained and demonstrated in person. This paper studies the role of short-term cross-border labor movements for innovation by estimating the recent impact of U.S. business travel to foreign countries on their patenting rates. Business travel is shown to have a signi…cant e¤ect up and beyond technology transfer through the channels of international trade and foreign direct investment. On average, a 10% increase in business travel leads to an increase in patenting by about 0.2%, and inward business travel is about one fourth as potent for innovation as domestic R&D spending. We show that the technological knowledge of each business traveler matters by estimating a higher impact for travelers that originate in U.S. states with substantial innovation, such as California. This study provides initial evidence that international air travel may be an important channel through which cross-country income di¤erences can be reduced.

Air service and urban growth: Evidence from a quasi-natural policy experiment

“…22 Several channels have been suggested for the productivity effect of air transport services. First, air travel facilitates face-to-face communication, which is essential for innovation, technology diffusion, and for coordination and efficient allocation of resources (see, among others, Gaspar and Glaeser, 1998;Audretsch and Feldman, 1996;Hovhannisyan and Keller, 2011;Giroud, 2013). Second, the availability of air services reduces transaction costs, increasing the openness of a region to trade (Poole, 2010;Cristea, 2011).…”

US High-Skilled Immigration, Innovation, and Entrepreneurship

“…13 Related work includes Nanda and Khanna (2010) and Hovhannisyan and Keller (2010). Return migration among immigrants more broadly is better studied (e.g., Dustmann (1996) and later work) than the high-skilled group on which this review focuses.…”

Socio-occupational and geographical determinants of the frequency of long-distance business travel in France

“…And although the transmission of information by ICT is increasing, face-to-face contacts remain essential because they are an efficient means of communication for complex information (Lorentzon, 2003). In particular face-to-face communication is crucial for technology transfer because technology is best explained and demonstrated in person (Hovhannisyan and Keller, 2011). In addition physical encounters can help solve incentive problems, facilitate socialisation and learning and finally contribute to psychological motivation (Bathelt et al, 2004;Jones, 2007;Julsrud et al, 2012;Stoper and Venables, 2004;Torre and Rallet, 2005).…”