Trade, FDI, and International Technology Diffusion

Xu, Bin; Wang, Jianmao

doi:2000.15.4.585

The Journal of Economic Integration 2000 December;15(4) :585-601.
DOI: https://doi.org/10.11130/jei.2000.15.4.585

Trade, FDI, and International Technology Diffusion

Bin Xu, Jianmao Wang

University of Florida
University of Florida and CEIBS

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.

Keywords: International Trade | FDI | Technology Diffusion

REFERENCE

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2.	Coe, D.T. and E. Helpman (1995), "International R&D Spillovers," European Economic Review 39, 859-887.