Foreign Direct Investment and the Nature of the Imitation Process

Hélène Latzer

No 2006012, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: We study the optimal imitation strategy of a developing country having access to both imitation through trade and imitation through Foreign Direct Investments (FDIs). We base ourselves on an extension of the Romer ‘variety model’ (1990) of technology-driven growth, and find that the two types of imitation are substitutes and not complements. We characterize a condition on the technology level transferred by multinational foreign firms for imitation through FDI to be optimal, and study the effect of a technological acceleration.

JEL-codes: F23 O33 O40 (search for similar items in EconPapers)
Pages: 30
Date: 2006-05-01
New Economics Papers: this item is included in nep-dev, nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvec:2006012

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