Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries
This paper examines two sources of global knowledge spillovers: foreign direct investments and trade. Empirical evidence demonstrates that foreign direct investment and trade can contribute to overall domestic productivity growth only when the tech...
| Main Authors: | , , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
|
| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120103140509 http://hdl.handle.net/10986/3217 |
| id |
okr-10986-3217 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AGRICULTURE CAPABILITY CAPABILITY BUILDING CAPITAL EXPENDITURES COMPARATIVE ADVANTAGE COMPARATIVE ECONOMICS COMPETITIVENESS COUNTRY RISK DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT FOREIGN INVESTMENT DOMESTIC FIRMS DOMESTIC MARKET ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC SYSTEMS ECONOMICS ELASTICITY ELECTRICITY EQUIPMENT EQUITY CAPITAL EXCHANGE RATE EXCHANGE RATES EXCHANGE TRANSACTIONS EXPORTS EXTERNALITIES FDI FINANCE CORPORATION FIXED CAPITAL FIXED COSTS FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN EXCHANGE FOREIGN FIRM FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS GDP GLOBAL DEVELOPMENT FINANCE GLOBAL ECONOMY GLOBAL KNOWLEDGE GROSS FIXED CAPITAL FORMATION GROSS VALUE GROWTH CYCLES GROWTH THEORIES HOST COUNTRIES HOST COUNTRY HUMAN CAPITAL INCOME INDUSTRIAL COUNTRIES INDUSTRIAL DEVELOPMENT INDUSTRIAL ECONOMICS INDUSTRIALISING ECONOMIES INEFFICIENCY INNOVATION INTERNATIONAL COMPETITIVENESS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTERNATIONAL LABOUR ORGANIZATION INTERNATIONAL STANDARD INTERNATIONAL TRADE KNOWLEDGE GENERATION LABOR COSTS LABOR FORCE LABOR MOBILITY LABOUR LONG-TERM INVESTMENTS MANUFACTURING MANUFACTURING FIRMS MANUFACTURING SECTOR MARGINAL COST MARKET POTENTIAL MARKET STRUCTURE MATERIAL MNE MULTINATIONAL CORPORATIONS MULTINATIONAL ENTERPRISE MULTINATIONAL ENTERPRISES NATURAL RESOURCE NATURAL RESOURCES NEW TECHNOLOGY OPEN ACCESS OPEN ECONOMY OUTPUTS PHONE POTENTIAL OUTPUT PRIVATE INVESTMENT PRIVATE SECTOR PRIVATIZATION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC POLICY R&D RAPID EXPANSION REAL ESTATE REINVESTMENT REINVESTMENT OF EARNINGS RESULT RESULTS RETAIL TRADE SUBSTITUTION EFFECT TECHNOLOGICAL CHANGES TECHNOLOGICAL PROGRESS TECHNOLOGY GAP TECHNOLOGY SPILLOVER TECHNOLOGY SPILLOVERS TECHNOLOGY TRANSFER TECHNOLOGY TRANSFERS TIME PERIOD TIME PERIODS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE POLICIES TRADE POLICY TRADE REFORMS TRANSITION COUNTRIES TRANSITION ECONOMIES UNEMPLOYED UNSKILLED LABOR USES VALUE ADDED VARIABLE COSTS WEB WORLD DEVELOPMENT INDICATORS WORLD TRADE WORLD TRADE ORGANIZATION |
| spellingShingle |
AGRICULTURE CAPABILITY CAPABILITY BUILDING CAPITAL EXPENDITURES COMPARATIVE ADVANTAGE COMPARATIVE ECONOMICS COMPETITIVENESS COUNTRY RISK DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT FOREIGN INVESTMENT DOMESTIC FIRMS DOMESTIC MARKET ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC SYSTEMS ECONOMICS ELASTICITY ELECTRICITY EQUIPMENT EQUITY CAPITAL EXCHANGE RATE EXCHANGE RATES EXCHANGE TRANSACTIONS EXPORTS EXTERNALITIES FDI FINANCE CORPORATION FIXED CAPITAL FIXED COSTS FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN EXCHANGE FOREIGN FIRM FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS GDP GLOBAL DEVELOPMENT FINANCE GLOBAL ECONOMY GLOBAL KNOWLEDGE GROSS FIXED CAPITAL FORMATION GROSS VALUE GROWTH CYCLES GROWTH THEORIES HOST COUNTRIES HOST COUNTRY HUMAN CAPITAL INCOME INDUSTRIAL COUNTRIES INDUSTRIAL DEVELOPMENT INDUSTRIAL ECONOMICS INDUSTRIALISING ECONOMIES INEFFICIENCY INNOVATION INTERNATIONAL COMPETITIVENESS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTERNATIONAL LABOUR ORGANIZATION INTERNATIONAL STANDARD INTERNATIONAL TRADE KNOWLEDGE GENERATION LABOR COSTS LABOR FORCE LABOR MOBILITY LABOUR LONG-TERM INVESTMENTS MANUFACTURING MANUFACTURING FIRMS MANUFACTURING SECTOR MARGINAL COST MARKET POTENTIAL MARKET STRUCTURE MATERIAL MNE MULTINATIONAL CORPORATIONS MULTINATIONAL ENTERPRISE MULTINATIONAL ENTERPRISES NATURAL RESOURCE NATURAL RESOURCES NEW TECHNOLOGY OPEN ACCESS OPEN ECONOMY OUTPUTS PHONE POTENTIAL OUTPUT PRIVATE INVESTMENT PRIVATE SECTOR PRIVATIZATION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC POLICY R&D RAPID EXPANSION REAL ESTATE REINVESTMENT REINVESTMENT OF EARNINGS RESULT RESULTS RETAIL TRADE SUBSTITUTION EFFECT TECHNOLOGICAL CHANGES TECHNOLOGICAL PROGRESS TECHNOLOGY GAP TECHNOLOGY SPILLOVER TECHNOLOGY SPILLOVERS TECHNOLOGY TRANSFER TECHNOLOGY TRANSFERS TIME PERIOD TIME PERIODS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE POLICIES TRADE POLICY TRADE REFORMS TRANSITION COUNTRIES TRANSITION ECONOMIES UNEMPLOYED UNSKILLED LABOR USES VALUE ADDED VARIABLE COSTS WEB WORLD DEVELOPMENT INDICATORS WORLD TRADE WORLD TRADE ORGANIZATION Castillo, Leopoldo Laborda Salem, Daniel Sotelsek Guasch, Jose Luis Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries |
| geographic_facet |
Latin America & Caribbean |
| relation |
Policy Research working paper ; no. WPS 5931 |
| description |
This paper examines two sources of
global knowledge spillovers: foreign direct investments and
trade. Empirical evidence demonstrates that foreign direct
investment and trade can contribute to overall domestic
productivity growth only when the technology gap between
domestic and foreign firms is not too large and when a
sufficient absorptive capacity is available in domestic
firms. The paper proposes the terms research and development
and labor quality to capture the innovative and absorptive
capacity of the country. The spillover effects in
productivity are analyzed using a stochastic frontier
approach. This productivity (in terms of total factor
productivity) is decomposed using a generalized Malmquist
output oriented index, in order to evaluate the specific
effect in technical change, technical efficiency change, and
scale efficiency change. Using country-level data for 16
Latin American countries for 1996-2006, the empirical
analysis shows positive productivity spillovers from foreign
direct investment and trade only when the country has
absorptive capacity in terms of research and development.
Foreign direct investment and trade spillovers are found to
be positive and significant for scale efficiency change and
total productivity factor change. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Castillo, Leopoldo Laborda Salem, Daniel Sotelsek Guasch, Jose Luis |
| author_facet |
Castillo, Leopoldo Laborda Salem, Daniel Sotelsek Guasch, Jose Luis |
| author_sort |
Castillo, Leopoldo Laborda |
| title |
Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries |
| title_short |
Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries |
| title_full |
Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries |
| title_fullStr |
Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries |
| title_full_unstemmed |
Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries |
| title_sort |
innovative and absorptive capacity of international knowledge : an empirical analysis of productivity sources in latin american countries |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120103140509 http://hdl.handle.net/10986/3217 |
| _version_ |
1764386621016244224 |
| spelling |
okr-10986-32172021-04-23T14:02:08Z Innovative and Absorptive Capacity of International Knowledge : An Empirical Analysis of Productivity Sources in Latin American Countries Castillo, Leopoldo Laborda Salem, Daniel Sotelsek Guasch, Jose Luis AGRICULTURE CAPABILITY CAPABILITY BUILDING CAPITAL EXPENDITURES COMPARATIVE ADVANTAGE COMPARATIVE ECONOMICS COMPETITIVENESS COUNTRY RISK DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT FOREIGN INVESTMENT DOMESTIC FIRMS DOMESTIC MARKET E-MAIL ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC SYSTEMS ECONOMICS ELASTICITY ELECTRICITY EQUIPMENT EQUITY CAPITAL EXCHANGE RATE EXCHANGE RATES EXCHANGE TRANSACTIONS EXPORTS EXTERNALITIES FDI FINANCE CORPORATION FIXED CAPITAL FIXED COSTS FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN EXCHANGE FOREIGN FIRM FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTORS GDP GLOBAL DEVELOPMENT FINANCE GLOBAL ECONOMY GLOBAL KNOWLEDGE GROSS FIXED CAPITAL FORMATION GROSS VALUE GROWTH CYCLES GROWTH THEORIES HOST COUNTRIES HOST COUNTRY HUMAN CAPITAL INCOME INDUSTRIAL COUNTRIES INDUSTRIAL DEVELOPMENT INDUSTRIAL ECONOMICS INDUSTRIALISING ECONOMIES INEFFICIENCY INNOVATION INTERNATIONAL COMPETITIVENESS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTERNATIONAL LABOUR ORGANIZATION INTERNATIONAL STANDARD INTERNATIONAL TRADE KNOWLEDGE GENERATION LABOR COSTS LABOR FORCE LABOR MOBILITY LABOUR LONG-TERM INVESTMENTS MANUFACTURING MANUFACTURING FIRMS MANUFACTURING SECTOR MARGINAL COST MARKET POTENTIAL MARKET STRUCTURE MATERIAL MNE MULTINATIONAL CORPORATIONS MULTINATIONAL ENTERPRISE MULTINATIONAL ENTERPRISES NATURAL RESOURCE NATURAL RESOURCES NEW TECHNOLOGY OPEN ACCESS OPEN ECONOMY OUTPUTS PHONE POTENTIAL OUTPUT PRIVATE INVESTMENT PRIVATE SECTOR PRIVATIZATION PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC POLICY R&D RAPID EXPANSION REAL ESTATE REINVESTMENT REINVESTMENT OF EARNINGS RESULT RESULTS RETAIL TRADE SUBSTITUTION EFFECT TECHNOLOGICAL CHANGES TECHNOLOGICAL PROGRESS TECHNOLOGY GAP TECHNOLOGY SPILLOVER TECHNOLOGY SPILLOVERS TECHNOLOGY TRANSFER TECHNOLOGY TRANSFERS TIME PERIOD TIME PERIODS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRADE POLICIES TRADE POLICY TRADE REFORMS TRANSITION COUNTRIES TRANSITION ECONOMIES UNEMPLOYED UNSKILLED LABOR USES VALUE ADDED VARIABLE COSTS WEB WORLD DEVELOPMENT INDICATORS WORLD TRADE WORLD TRADE ORGANIZATION This paper examines two sources of global knowledge spillovers: foreign direct investments and trade. Empirical evidence demonstrates that foreign direct investment and trade can contribute to overall domestic productivity growth only when the technology gap between domestic and foreign firms is not too large and when a sufficient absorptive capacity is available in domestic firms. The paper proposes the terms research and development and labor quality to capture the innovative and absorptive capacity of the country. The spillover effects in productivity are analyzed using a stochastic frontier approach. This productivity (in terms of total factor productivity) is decomposed using a generalized Malmquist output oriented index, in order to evaluate the specific effect in technical change, technical efficiency change, and scale efficiency change. Using country-level data for 16 Latin American countries for 1996-2006, the empirical analysis shows positive productivity spillovers from foreign direct investment and trade only when the country has absorptive capacity in terms of research and development. Foreign direct investment and trade spillovers are found to be positive and significant for scale efficiency change and total productivity factor change. 2012-03-19T17:28:26Z 2012-03-19T17:28:26Z 2012-01-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120103140509 http://hdl.handle.net/10986/3217 English Policy Research working paper ; no. WPS 5931 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Latin America & Caribbean |