Technology Transfer, Foreign Direct Investment and International Trade

Leonard K. Cheng
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Leonard K. Cheng: Hong Kong University of Science and Technology

No 1777, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: By developing a Ricardian trade model that features technology transfer via foreign direct investment (FDI), we show that technology transfer via multinational enterprises (MNEs) increases world output and trade in goods and services. When there are many goods a continuous reduction in the cost of technology transfer will cause increasingly more technologically advanced goods to go through the product cycle, i.e., goods initially produced in the advanced North are later produced in the backward South as a result of increased technology transfer via MNEs.

Date: 2000-08-01
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