Externalities play a central role in most theories of economic growth. We argue that international externalities, in … have international knowledge externalities. When calibrated, the hybrid model does a surprisingly good job of generating …

This paper relates to the literature on pecuniary externalities from FDI. Their transmission mechanism is complex …, because pecuniary externalities may cause knowledge externalities and inversely. Moreover, each type of externality, or a … combination of both, may increase firm productivity. Thus, so far, the factors determining pecuniary externalities are not fully …