Foreign Direct Investment and Spillovers through Workers' Mobility

Andrea Fosfuri, Massimo Motta () and Thomas Rønde

No 2194, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We analyze a model where a multinational firm can use a superior technology in a foreign subsidiary only after training a local worker. Technological spillovers from foreign direct investment arise when this worker is later hired by a local firm. Pecuniary spillovers arise when the foreign affiliate pays the trained worker a higher wage to prevent her from moving to a local competitor. We study conditions under which these spillovers occur. We also show that the multinational firm might find it optimal to export instead of investing abroad to avoid dissipation of its intangible assets or the payment of a higher wage to the trained worker.

Keywords: Externalities; Labour Mobility; Multinational Corporations; Spillovers; Training (search for similar items in EconPapers)
JEL-codes: F23 J63 O12 (search for similar items in EconPapers)
Date: 1999-08
References: Add references at CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2194 (application/pdf)

Related works:
Journal Article: Foreign direct investment and spillovers through workers' mobility (2001)
Working Paper: Foreign direct investments and spillovers through workers' mobility (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2194

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2194

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().