Foreign Know-How, Firm Control, and the Income of Developing Countries / Ariel Burstein, Alexander Monge-Naranjo.

Format:

Book

Author/Creator:

Burstein, Ariel.

Contributor:

National Bureau of Economic Research.

Monge-Naranjo, Alexander.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13073.

NBER working paper series no. w13073

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

Managerial know-how shapes the productivity of firms by defining the set of available technologies, production choices, and market opportunities. This know-how can be reallocated across countries as managers acquire control of factors of production abroad. In this paper, we construct a quantitative model of cross-country income differences to study the aggregate consequences of international mobility of managerial know-how. We use the model and aggregate data to infer the relative scarcity of this form of know-how for a sample of developing countries. We also conduct policy counterfactuals and find that on average, developing countries gain up to 23% in output and 9% in consumption when they eliminate all barriers to foreign control of domestic factors of production.

Notes:

Print version record

May 2007.