We examine whether two important theories of trade, the Heckscher-Ohlin theory and the increasing returns theory, can account for the empirical success of the so-called gravity equation. Since versions of both theories can predict this equation, we tackle the model identification problem by...

This paper estimates the effect of changing environmental standards on patterns of international investment. The analysis advances the existing literature in three ways. First, we avoid comparing different countries by examining foreign direct investment in the United States and differences in...

This article presents a model suggesting that the pattern of a country's intermediate goods imports affects its level of productivity because a country that imports such goods primarily from technological leaders receives more technology than a country that imports primarily from follower...

In this paper, I examine the relation of trade patterns, technology flows, and productivity growth; in particular, the hypothesis that foreign R&D investments which are transmitted through trade in intermediate inputs lead to domestic productivity gains. I derive several estimation equations...

This paper estimates the extent to which changing environmental standards have altered patterns of international investment. Our analysis goes beyond the existing literature in three ways. First, we avoid comparing regulations in different countries by using data on inward foreign direct...

Convergence in per capita income turns on whether technological knowledge spillovers are global or local. Global spillovers favor convergence, while a geographically limited scope of knowledge diffusion can lead to regional clusters of countries with persistently different levels of income per...

In this paper, I analyze recent findings by Coe and Helpman (1995) on trade-related international R&D spillovers. A Monte Carlo based robustness test is proposed which compares the elasticity of domestic productivity with respect to foreign R&D estimated by Coe and Helpman with an elasticity...

This paper integrates earlier studies on the link of productivity and research and development (R&D) in different industries of a closed economy with the more recent emphasis on R&D-driven growth and international trade in open economies. In this framework, technology in the form of product...

This paper presents and tests a new model of multinational firms to explain a rich array of multinational behavior. In contrast to most approaches, here the multinational faces costs to transferring its know-how that are increasing in technological complexity. Costly technology transfer gives...

We present a model of R&D-driven growth which predicts that technology, in the form of product designs and created through R&D investments, is transmitted to other domestic and foreign sectors by being embodied in differentiated intermediate goods. Empirical results are presented employing data...