Openness, technology capital, and development

Ellen McGrattan and Edward Prescott

Journal of Economic Theory, 2009, vol. 144, issue 6, 2454-2476

Abstract: In this paper, we extend the growth model to include firm-specific technology capital and use it to assess the gains from opening to foreign direct investment. A firm's technology capital is its unique know-how from investing in research and development, brands, and organization capital. Technology capital is distinguished from other forms of capital in that a firm can use it simultaneously in multiple domestic and foreign locations. A country can exploit foreign technology capital by permitting direct investment by foreign multinationals. In both steady-state and transitional analyses, the extended growth model predicts large gains to being open.

Keywords: Openness; Foreign; direct; investment (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (97)

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Related works:
Working Paper: Openness, technology capital, and development (2008)
Working Paper: Openness, Technology Capital, and Development (2008)
Working Paper: Openness, technology capital, and development (2007)
Working Paper: Openness, Technology Capital, and Development (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:144:y:2009:i:6:p:2454-2476

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