DP2337 Importance of International Linkages for Local Know-How Flows: Some Econometric Evidence From Belgium

Author(s): Bruno Cassiman, Reinhilde Veugelers
Publication Date: December 1999
Keyword(s): Access To International Know-How, Local Transfers Of Know-How, Multinationals, Technology Transfer Channels
JEL(s): D21, F23, L16, O23
Programme Areas: Industrial Organization, International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2337

External knowledge is an important input for the innovation process of firms. Increasingly, this knowledge is likely to originate from outside of their national borders. This explains the preoccupation of policymakers with stimulating local technology transfers coming from international firms. We find that firms that have access to the international technology market are more likely to transfer technology to the local economy. In doing so, we qualify the traditional assertion that multinational firms are more likely to transfer technology to the local economy. Once controlled for the superior access to the international technology market that multinationals enjoy, we find that these firms are not more likely to transfer technology to the local economy compared to exporting or local firms that have access to the international technology market. In summary, the main result of this paper is that it is not so much the international character of the firms, but rather their access to the international technology market that is important for generating external knowledge transfers to the local economy.