Foreign direct investments and spillovers through workers' mobility

Andrea Fosfuri, Massimo Motta () and Thomas Ronde

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We analyze a model where a multinational firm can use its superior technology in a foreign subsidiary only after appropriate training of local managers. Technological spillovers from foreign direct investment arise when such managers are later hired by a local firm. Benefits for the host economy may also take the form of the rent that trained managers receive by the foreign affiliate to prevent them from moving to local competitors. We study conditions under which technological spillovers occur. We also show that under certain circumstances the multinational firm might find it optimal to resort to export instead of foreign direct investment, to avoid dissipation of its intangible assets.

Keywords: Multinational corporations; externalities; training; labor mobility (search for similar items in EconPapers)
JEL-codes: F23 J63 O12 (search for similar items in EconPapers)
Date: 1998-01
New Economics Papers: this item is included in nep-ifn and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Foreign direct investment and spillovers through workers' mobility (2001)
Working Paper: Foreign Direct Investment and Spillovers through Workers' Mobility (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:258

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