Multinational Enterprises, Technology Diffusion, and Host Country Productivity Growth

This paper investigates U.S. multinational enterprises (MNEs) as a channel of international technology diffusion in 40 countries over 1966-1994. Data on technology transfer are used to distinguish between the technology diffusion effect and other productivity-enhancing effects of MNEs. The study finds that the technology transfer of U.S. MNEs contributes to the productivity growth in DCs but not in LDCs. It further shows that a minimum human capital threshold is required for a country to benefit from the technology transfer of U.S. MNEs; however, this threshold is not met in most LDCs