Trade, FDI, and International Technology Diffusion

• Xu, Bin  
• Wang, Jianmao  

Indexed by

Scopus

Abstract

This　paper　examines　international　trade　and　foreign　direct　investment　as　channels　for　technology　diffusion　among　industrialized　countries.　We　find　strong　empirical　support　for　capital　goods　trade　as　a　channel　for　international　technology　diffusion　and　some　evidence　that　multinational　enterprises　(outward　FDI)　transmit　foreign　technology　back　to　the　home　country.　We　find　no　evidence　that　inward　FDI　is　a　significant　channel　for　international　technology　diffusion　among　industrialized　countries.　Our　results　also　show　that　technology　diffuses　in　disembodied　forms,　with　countries　that　are　farther　from　the　world　technology　frontier　benefiting　more.

Keyword

• Capital goods
• Distributive trade
• Foreign direct investments
• Information technology
• International trade
• Multinational corporations
• Productivity
• Statistical estimation
• Statistical significance
• Technology transfer

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