Date of Award

Spring 1-1-2012

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Wolfgang Keller

Second Advisor

James Markusen

Third Advisor

Keith E. Maskus

Fourth Advisor

Murat F. Iyigun

Fifth Advisor

Thibault Fally

Abstract

The transfer of technology is central to modern economic discourse because of its implications for economic growth and long-run convergence of incomes. In this dissertation, I investigate questions on channels and modes of technology transfer, analyzing cross-border flows of goods, ideas and people.

In the first chapter, I examine the significance of technological distance for the mode of international knowledge transfer within multinational corporations. The technology transfer within multinationals can happen directly, when the affiliate licenses the technology from the 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 to license the technology or import it through intermediate goods. The main finding is that a large technology gap of an affiliate favors indirect knowledge transfer through imports.

In the second chapter, we examine (with Wolfgang Keller) the importance of cross-border labor flows for innovation. 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. The results indicate that business travel has a significant effect on patenting rates above and beyond technology transfer through the channels of international trade and foreign direct investment. This study provides initial evidence that international air travel may be an important channel through which cross-country income differences can be reduced.

In the final chapter I analyze whether short-term labor movements matter for technology sourcing from abroad. As knowledge creation is concentrated in several countries, it is especially important for developing countries to tap into foreign knowledge. This paper focuses on a novel channel of technology sourcing: international business travel. Business travelers coming to a high-technology country can learn about technological knowledge through face-to-face communication and bring it back to their home country. This paper finds that business travel to the U.S. from foreign countries increases their domestic innovation.

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