While recent advances in communications technology have effectively reduced the physical distance that knowledge and innovations have to travel between countries, cultural differences between countries still limit the ease with which innovations are transferred and adapted. So, countries with...

We explore the effect of foreign direct investment on economic growth in developing countries, distinguishing between mergers and acquisitions ("M&As") and "greenfield" investment. A simple model captures the key difference between the two types of FDI: unlike greenfield investment, M&As partly...