Template-type: ReDIF-Paper 1.0 Author-Name: Belderbos, René Author-Email: rene.belderbos@econ.kuleuven.be Author-Workplace-Name: Katholieke Universiteit Leuven, UNU-MERIT, and University of Maastricht Author-Name: Ito, Banri Author-Email: ito-banri@rieti.go.jp Author-Workplace-Name: Research Institute of Economy Trade and Industry (RIETI) Author-Name: Wakasugi, Ryuhei Author-Email: wakasugi@kier.kyoto-u.ac.jp Author-Workplace-Name: Kyoto University, Institute of Economic Research Title: Intra-firm Technology Transfer and R&D in Foreign Affiliates: Substitutes or Complements? Evidence from Japanese Multinational Firms Abstract: R&D in foreign affiliates and technology transferred from their parent firms are important potential drivers of productivity in host countries. In this paper we examine the simultaneous impact of local R&D and intra-firm international technology transfer on productivity growth in foreign affiliates. We estimate a dynamic productivity model on a large sample of Japanese manufacturing affiliates worldwide in 1996-1997 and 1999-2000. We find that both affiliate R&D and intra-firm technology transfer contribute to productivity growth, while technology transfer exhibits decreasing marginal returns. The two sources of technology are complements: use of one source of technology increases the marginal impact of the other. Classification-JEL: F23, O32, O33 Keywords: R&D, technology transfer, multinational firms Series: UNU-MERIT Working Papers Creation-Date: 2008 Number: 2008-045 File-URL: https://unu-merit.nl/publications/wppdf/2008/wp2008-045.pdf File-Format: application/pdf File-Size: 275 Kb Handle: RePEc:unm:unumer:2008045