Multinationals, Endogenous Growth and Technological Spillovers: Theory and Evidence

Henrik Braconier, Richard Baldwin and Rikard Forslid
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Henrik Braconier: The Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

No 519, Working Paper Series from Research Institute of Industrial Economics

Abstract: FDI has received surprisingly little attention in theoretical and empirical work on openness and growth. This paper presents a theoretical growth model where MNCs directly affect the endogenous growth rate via technological spillovers. This is novel since other endogenous growth models with MNCs, e.g. the Grossman-Helpman model, assume away the knowledge-spillovers aspect of FDI. We also present econometric evidence (using industry-level data from seven OECD nations) that broadly supports the model. Specifically, we find industry-level scale effects and international knowledge spillovers that are unrelated to FDI, but we also find that bilateral spillovers are boosted by bilateral FDI.

Keywords: MNCs; Economic growth; R&D (search for similar items in EconPapers)
JEL-codes: F12 O32 O41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1999-04-01
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Citations: View citations in EconPapers (30)

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Related works:
Journal Article: Multinationals, Endogenous Growth, and Technological Spillovers: Theory and Evidence* (2005)
Working Paper: Multinationals, Endogenous Growth and Technological Spillovers: Theory and Evidence (1999)
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