R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry

The capacity of developing economies to narrow the gap in living standards with the OECD nations depends critically on their ability to imitate and innovate new technologies. Toward this end, developing economies have access to three avenues of technological advance: technology transfer, domestic R&D, and foreign direct investment. This paper examines the contributions of each of these avenues, as well as their interactions, to productivity and knowledge production within Chinese industry. Based on a large data set for China’s large and medium-size enterprises, the estimation results show that technology transfer – whether domestic or foreign – affects productivity only through its interactions with in-house R&D. Foreign direct investment does not appear to facilitate the adoption of market-mediated foreign technology transfer. Firms wishing to produce patentable knowledge do not benefit from technology transfer; patentable knowledge is created exclusively through in-house R&D operations.http://deepblue.lib.umich.edu/bitstream/2027.42/39968/3/wp582.pd

Openness, Technology Capital, and Development

In this paper, we extend the growth model to include firm-specific technology capital and use it to assess the gains from opening to foreign direct investment. A firm's technology capital is its unique know-how from investing in research and development, brands, and organization capital. What distinguishes technology capital from other forms of capital is the fact that a firm can use it simultaneously in multiple domestic and foreign locations. Foreign technology capital is exploited by permitting foreign direct investment by multinationals. In both steady-state and transitional analyses, the extended growth model predicts large gains to being open.

Foreign technology imports and economic growth in developing countries

The authors investigate the relationship between foreign technology imports and economic growth in developing countries. They develop an intertemporal endogenous growth model that explicitly accepts foreign technology imports as a factor of production. The model establishes a link between the growth rate of productivity in a developing country and the country's intensity of learning to use foreign technologies. They hypothesize that a developing country's economic growth rate increases as foreign technology imports increase. They run regressions with data for about 50 developing countries, using different econometric methods and time spans. These empirical tests confirm the hypothesis that foreign technology transfers boost income growth rates. Moreover, economic developing in developing countries differs from that in industrial countries. In developing countries, increases in productivity depend not on innovation but on importing foreign plants and equipment and on borrowing foreign technology.Economic Theory&Research,Environmental Economics&Policies,Achieving Shared Growth,Economic Growth,Inequality

How Do Trade, Foreign Investment, and Technology Affect Employment Patterns in Organized Indian Manufacturing?

The present study investigates into the impact of trade, foreign investment, and technology on three different employment patterns in India’s organized manufacturing sector. These employment patterns cover three disadvantage categories of workers viz., women vis-à-vis men workers, contract vis-à-vis regular workers and unskilled vis-à-vis skilled workers. A conceptual and empirical framework has been developed linking these employment patterns to trade, foreign investment, and technology, and tested for a sample of Indian industries. The research suggests that trade has been employment promoting for women and unskilled workers while it has remain neutral between contract and regular workers. The impact of foreign investment has been observed to be negative for contract and unskilled workers. The overall impact of technology encompassing in-house R&D, foreign technology imports, and capital-intensity has been mostly negative for women and unskilled workers but positive for contract workers.Employment Patterns; Trade; Foreign Investment; Technology

Are there dynamic externalities from direct foreign investment? Evidence for Morocco

Many developing countris now actively solicit foreign investment, offering income tax holidays, import duty exemptions, and subsidies to foreign firms. One reason for subsidizing these firms is the positive externalities as foreign technology is transferred from foreign to domestic firms. This paper employs a unique firm-level dataset to test for such dynamic externalities in the Moroccan manufacturing sector. We find no evidence of positive externalities, although the dispersion of productivity is smaller in sectors with more foreign firms. Using detailed information on quotas and tariffs, we also reject the hypothesis that the lack of such dynamic externalities occurs because foreign investors are attracted to protected domestic sectors.Morocco; foreign investment; technology transfer; trade reform

Effects of Foreign Presence in a Transition Economy: Regional and Industry-Wide Investments and Firm-Level Exports in Ukrainian Manufacturing

We investigate the effects of regional and industry-wide foreign presence and foreign direct investment (FDI) on export volumes of Ukrainian manufacturing firms using unpublished panel data from 1996-2000. Foreign presence through FDI may have negative competition effects on domestic firms' performance while, at the same time, domestic firms' productivity may be increased by technology transfer or through training and demonstration effects. From a Cournot competition model including negative competition and positive technology-spillover effects, we derive the hypotheses that foreign presence and foreign investment might positively affect domestic firms' output and exports. Our estimation results support these hypotheses and suggest in particular that large firms and durable-goods producers benefit most from foreign presence and investments.transition, foreign direct investment, spillovers, firm performance.

The positive analysis about the condition of Chinese technology gain FDI

The technical level in 21st century will directly decide the international competition ability of a country and become the core factor which the international competition will subdue. Using the reverse effect of shift of technology in foreign investment, a company gains advanced technology through foreign investment and shift it to the investment country, which movement we call it technical gain FDI. Various countries in the world especially the developing countries, such as China, its research level and the environment can’t adapt the demand of economic globalization. So it is a realistic choice to the developing countries to develop technology gain investment and combine with the other foreign investment to gain the advanced technology.international competition, foreign direct investment gains, globalisation

Strategic R&D location in European manufacturing industries.

We develop and empirically test a model of foreign R&D investments that takes into account strategic interaction in R&D location decisions by multinational firms in the context of R&D spillovers and foreign technology sourcing strategies. In a two-country, two-firm model with cross investments, the optimal share of R&D performed abroad depends on the efficiency of intra-firm international technology transfer, the degree of inter-firm R&D spillovers, the intensity of product market competition, and the importance of the general knowledge pool. The impact of these factors differs markedly between technology leading firms and technology laggards. We find support for most of the predictions of the model in an empirical analysis of patents based on innovations in foreign countries by 131 leading European manufacturing firms in 22 ISIC industries in 1996-1997. For technology leaders, the share of patents originating in other EU countries responds positively to host country product market competition and is strongly increasing in the level of intellectual property rights protection. Foreign R&D by technology laggards is discouraged by host country competition but increases with the efficiency of (reverse) technology transfer. Foreign R&D of both leaders and laggards increases with the size of the local knowledge pool and the size of production operations in the host country.Competition; Country; Decision; Decisions; Efficiency; Empirical analysis; Factors; Firms; Impact; Industries; Industry; Innovation; Innovations; Intellectual property; Intensity; Interfirm R&D; International; Investment; Investments; Knowledge; Manufacturing; Manufacturing firms; Market; Model; Multinational firms; Optimal; Patents; Prediction; Predictions; Product; R&D; Size; Sourcing; Spillovers; Strategy; Technology; Technology transfer;

MNEs, internationalization of R&D and the impact on local firms: Evidence from China's high-tech industries.

This study examines the impact of FDI and foreign-owned Research and Development (R&D) on total factor productivity (TFP) of domestic firms in China's high-tech industries. Growth in local firm's TFP is modeled as being dependent on the local firm's distance in technology space to foreign affiliates in the same industry, along with R&D, both foreign-owned and domestic. This model is tested on small-sampled industry-level data for China for the period of 1997-2003, using a within estimator, panel data approach. The results show that the technology gap has a significantly positive relation to the improvement of domestic TFP growth productivity at the industry level. However, we do not find strong positive effect of foreign-owned R&D on improving local productivity. Domestic firms' own R&D, by contrast, is a significant determinant for local industry's productivity enhancement.local total factor productivityData; Domestic; Estimator; Firms; Foreign-owned research and development; Foreign direct investment; Growth; Impact; Industries; Industry; Investment; Local total factor productivity; Model; Multinational enterprises; Panel data; Productivity; R&D; Research; Research and development; Space; Spillovers; Studies; Technology; Technology spillovers; Total factor productivity;

The choice of transport technology in the presence of exports and FDI

In a set-up with intermediate production, we analyze how a shipper's choice of transport technology, traditional versus modern, interacts with the mode of foreign expansion by an service firm, export versus foreign direct investment (FDI). In terms of the mode of foreign expansion by the service firm, we obtain that: due to trade in intermediate goods, trade and FDI can be complements; the export strategy dominates when the economies of scale at plant level are high and trade costs are low; the FDI strategy is preferable when market size is large and trade costs are intermediate. In what concerns the choice of transport technology by the shipper, we find that: the modern technology tends to be implemented in larger markets; economic integration can encourage the adoption of modern technology vis-à-vis the traditional one; the modern technology adoption is more likely for intermediate levels of transport costs. We then have that modern technology adoption usually occurs under the FDI strategy, since both emerge when trade costs are intermediate and market size is large.Transport Technology, Foreign Direct Investment, Trade, Service Sector, Firm Location.