Working Papers
“Technology Gap and International Knowledge Transfer: New Evidence from the Operations of Multinational Corporations”, Job Market Paper, November 2011
Multinational corporations have long been recognized as both major creators of technology and conduits of technology transfer. Technology transfer can happen directly, when the affiliate licenses the technology from parent, or indirectly, when the affiliate imports intermediate goods with embodied technology. This paper estimates the effect of the affiliates' productivity relative to the frontier – the technology gap – on the choice of licensing the technology or importing it through intermediate goods. A novel measure of multinational technology transfer is employed using data on technology licensing payments versus imports from U.S. multinationals across many countries and industries. The main finding of this paper is that a large technology gap of an affiliate favors indirect knowledge transfer through imports. On average, a 10% increase in the technology gap decreases the ratio of licensing to importing inputs embodying the technology by 5%. Considering the fact that the access to ideas and generation of new ones are crucial for long-run economic growth and convergence of a country, this study highlights the policy implications for countries to raise their productivity levels.
“International Business Travel: An Engine of Innovation?” (with Wolfgang Keller), NBER Working Paper No. 17100, CEPR Discussion Paper No. 7829; revise and resubmit, Journal of Economic Growth
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 significant effect 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 0.3%. 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. Moreover, the business traveler effect on innovation also varies across industries. This study provides initial evidence that international air travel may be an important channel through which cross-country income differences can be reduced. We also discuss a number of policy issues in the context of short-term cross-border labor movements.
Coverage
Multinational corporations have long been recognized as both major creators of technology and conduits of technology transfer. Technology transfer can happen directly, when the affiliate licenses the technology from parent, or indirectly, when the affiliate imports intermediate goods with embodied technology. This paper estimates the effect of the affiliates' productivity relative to the frontier – the technology gap – on the choice of licensing the technology or importing it through intermediate goods. A novel measure of multinational technology transfer is employed using data on technology licensing payments versus imports from U.S. multinationals across many countries and industries. The main finding of this paper is that a large technology gap of an affiliate favors indirect knowledge transfer through imports. On average, a 10% increase in the technology gap decreases the ratio of licensing to importing inputs embodying the technology by 5%. Considering the fact that the access to ideas and generation of new ones are crucial for long-run economic growth and convergence of a country, this study highlights the policy implications for countries to raise their productivity levels.
“International Business Travel: An Engine of Innovation?” (with Wolfgang Keller), NBER Working Paper No. 17100, CEPR Discussion Paper No. 7829; revise and resubmit, Journal of Economic Growth
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 significant effect 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 0.3%. 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. Moreover, the business traveler effect on innovation also varies across industries. This study provides initial evidence that international air travel may be an important channel through which cross-country income differences can be reduced. We also discuss a number of policy issues in the context of short-term cross-border labor movements.
Coverage
- VoxEU - "International Business Travel and Innovation: Face-to-face is crucial", April 20, 2011
- The Wall Street Journal - "Flight Ban Takes Toll on Some Sectors", April 21, 2011
- Ökonomenstimme, April 26, 2011 and Handelsblatt, August 1, 2011
Work in Progress
“Inward Business Travel and Innovation”
“European Borders, Migrants and Patenting”
“Multinationals and Services Trade”
“European Borders, Migrants and Patenting”
“Multinationals and Services Trade”
