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Multinational Corporations and Knowledge Flows: Evidence from Patent Citations

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  • Shireen AlAzzawi

Abstract

This study investigates whether foreign direct investment (FDI) by a multinational corporation increases the likelihood that knowledge about new technologies and production processes will be exchanged between foreign and domestic firms. This could be an important channel for knowledge diffusion since such flows have proven to be highly geographically localized. I develop a framework for measuring the degree to which the close proximity of a multinational subsidiary can enhance flows of knowledge between firms of different countries. I use an original data set on the innovative activity of firms of more than 30 countries and find a strong positive effect of both inward and outward FDI on knowledge flows. Interestingly, I find that countries that are technological followers gain three times as much knowledge from inward FDI as leaders.

Suggested Citation

  • Shireen AlAzzawi, 2011. "Multinational Corporations and Knowledge Flows: Evidence from Patent Citations," Economic Development and Cultural Change, University of Chicago Press, vol. 59(3), pages 649-680.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/658350
    DOI: 10.1086/658350
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    Cited by:

    1. Adams-Kane, Jonathon & Lim, Jamus Jerome, 2011. "Growth poles and multipolarity," Policy Research Working Paper Series 5712, The World Bank.
    2. Chung, Yessica C.Y., 2012. "Ethnic Networks and Technical Knowledge Learning in Industrial Clusters," Working Papers 37, JICA Research Institute.
    3. Dachs, Bernhard, 2017. "Internationalisation of R&D: A Review of Drivers, Impacts, and new Lines of Research," MPRA Paper 83367, University Library of Munich, Germany.
    4. Yindan Ye & Kevin De Moortel & Thomas Crispeels, 2020. "Network dynamics of Chinese university knowledge transfer," The Journal of Technology Transfer, Springer, vol. 45(4), pages 1228-1254, August.
    5. Wei Yang & Xiang Yu & Dian Wang & Jinrui Yang & Ben Zhang, 2021. "Spatio-temporal evolution of technology flows in China: patent licensing networks 2000–2017," The Journal of Technology Transfer, Springer, vol. 46(5), pages 1674-1703, October.
    6. Long, Cheryl Xiaoning & Yi, Wei, 2024. "Information effects of high-speed rail: Evidence from patent citations in China," China Economic Review, Elsevier, vol. 84(C).

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