Foreign know-how, firm control, and the income of developing countries
By: Ariel Burstein, Alexander Monge-Naranjo.
Contributors: Monge-Naranjo, Alexander.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13073.; Working paper series (National Bureau of Economic Research) -- working paper no. 13073.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 41
Subjects: Intellectual capital -- Management; Knowledge management; Intellectual capital -- Developing countries
Description: 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: "May 2007"

Includes bibliographical references (p. 38-41).

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