Multinational enterprises, technology diffusion, and host country productivity growth

This paper investigates US multinational enterprises (MNEs) as a channel of international technology diffusion in 40 countries from 1966 to 1994. We use data on technology transfer to distinguish between the technology diffusion effect and other productivity-enhancing effects of MNEs. We find that the technology transfer provided by US MNEs contributes to the productivity growth in DCs but not in LDCs. We show that a country needs to reach a minimum human capital threshold level in order to benefit from the technology transfer of US MNEs; however, most LDCs do not meet this threshold requirement. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: O40; O30; F23.