The Role of Foreign Direct Investment and Imports of Capital Goods in the North-South Diffusion of Technology

The Role of Foreign Direct Investment and Imports of Capital Goods in the North-South Diffusion of Technology

Technology diffusion across industrial countries has been the subject of considerable research. During the last decade economists have measured qxtensively the extent to which productivity gains are transmitted across countries in the North. However, research on technology diffusion to developing countries vas been relatively scatce. This is surprising considering the importance that this source of productivity represects for cuntries in the South, This paper seeks to fill this gap. The results underline the importance of North-South schemes of integration for technology transgers as long as they lead to larger flows of FDI and trade from developed to developong countries.