Technology Sourcing and Reverse Spillovers

Nigel Driffield, JH Love

    Research output: Contribution to journalArticle

    89 Citations (Scopus)


    Recent theoretical work points to the possibility of foreign direct investment motivated not by 'ownership' advantages which may be exploited by a multinational enterprise but by the desire to access the superior technology of a host nation through direct investment. To be successful, technology sourcing foreign direct investment hinges crucially on the existence of domestic-to-foreign technological externalities within the host country. We test empirically for the existence of such 'reverse spillover' effects for a panel of UK manufacturing industries. The results demonstrate that technology generated by the domestic sector spills over to foreign multinational enterprises, but that this effect is restricted to relatively research and development intensive sectors. There is also evidence that these spillover effects are affected by the spatial concentration of industry, and that learning-by-doing effects are restricted to sectors in which technology sourcing is unlikely to be a motivating influence.
    Original languageEnglish
    Pages (from-to)659-672
    Number of pages14
    JournalManchester School
    Issue number6
    Publication statusPublished - 1 Dec 2003


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