Intra-industry Trade, Reconsidered: The Role of Technology Transfer and Foreign Direct Investment

摘要

Recent years have seen a remarkable increase in IIT between OECD and non-OECD countries. Our paper stays with the HK model and the HL estimationrnmethodology but expands the model and methodology by employing the Japanese technology transfer data and Japanese FDI data. Introducing technology transfer through FDI into the HL estimation methodology can explain the current IIT well. Licensing via FDI and human interaction such as Japanese workers and CEOs sent to overseas affiliates significantly increases IIT, particularly in VIIT with Asia. We can say that the HK model still has explanatory power in IIT analysis once technology transfer is taken into account.Furthermore, the finding that technology transfer can produce successful results in the HL framework and support the HK model prediction is robust even in a simultaneous equation approach, in which technology transfer is endogenously determined. Similarity in GDPs and factor endowments increases IIT. Also, the technology transfer by FDI can be significantly explained by GDPs and factor endowment differences. However, the results are in contrast with the trade equation. The dissimilarity in GDPs and factor endowments increases technology transfer by FDI.