Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95092
Authors: 
Braconier, Henrik
Baldwin, Richard E.
Forslid, Rikard
Year of Publication: 
1999
Series/Report no.: 
IUI Working Paper 519
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.
Subjects: 
MNCs
Economic growth
R&D
JEL: 
F12
O32
O41
Document Type: 
Working Paper

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