Journal
WORLD DEVELOPMENT
Volume 40, Issue 10, Pages 1982-1998Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.worlddev.2012.05.001
Keywords
R&D; FDI; trade; technical efficiency
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We study the effect of foreign research and development (R&D) transferred through imports and foreign direct investment (FDI) on domestic technical efficiency using stochastic frontier analysis. Unbalanced panel results from a 77-country sample over 1986-2007 show that FDI- and imports-transferred foreign R&D have a significant impact on domestic country's technical efficiency. Furthermore, we observe a complementarity between FDI-transferred R&D and domestic human capital. In other words, the domestic country needs to obtain a threshold level of human capital to benefit from FDI-transferred R&D. Other macro conditions such as infrastructure, political stability, and urbanization also help to improve the technical efficiency of a country. (C) 2012 Elsevier Ltd. All rights reserved.
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