It is often argued that multinationals are reluctant to transfer technology due to the fear of spillovers. We show that this need not be the case if host country policies like taxation are taken into account. Furthermore, we examine the incentives the multinational and the host country have to engage in an international joint venture. We show why a multinational may agree to enter a joint ventu...

This paper investigates FDI-related spillovers in Brazil for the period 1996-2005. In contrast to most previous recent studies, which have failed to identify any significant effects in emerging economies, we found that horizontal spillovers did arise in Brazil. However, they did not arise simply as a consequence of general FDI-mediated technology transfer from MNC headquarters, as the standard ...

We analyze a model where a multinational firm can use a superior technology in a foreign subsidiary only after training a local worker. Technological spillovers from foreign direct investment arise when this worker is later hired by a local firm. Pecuniary spillovers arise when the foreign affiliate pays the trained worker a higher wage to prevent her from moving to a local competitor. We study...

The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing “spillovers”: a positive effect from technological knowledge spillovers and negative business stealing effects from product market rivals. We develop a general framework incorporating...

This paper provides new evidence on the relationship between foreign direct investment (FDI) and the productivity of domestic firms. Using a specially designed survey on a sample of over 7,500 manufacturing firms in Vietnam we uncover some of the mechanisms that explain productivity spillovers from FDI through vertical linkages along the supply chain. Our results suggest that domestic firms exp...

This paper examines the effect of the presence of multinational companies on plant survival in the host country. We postulate that multinational companies can impact positively on plant survival through technology spillovers. We study the nature of the effect of multinationals using a Cox proportional hazard model which we estimate using plant level data for Irish manufacturing industries. Our ...

Foreign Direct Investment (FDI) in developing countries is expected to foster technology transfer from foreign-owned to local firms. Using detailed panel data from Tunisian manufacturing firms, we show that technological spillovers generated by FDI, as a form of technology transfer, help firms move near the best practice frontier (production frontier) measured by the Schmidt and Sickles method....

This paper analyzes the effects of a potential spillover on technology transfer of a multinational enterprise and on the host country policy. In particular, we examine how both parties’ incentives can be controlled through the ownership structure in an international joint venture. In contrast to existing arguments we show that spillovers must not always have negative effects on technology trans...