Latin America were started by immigrants (Maloney and Zambrano forthcoming). More recently, the high-tech clusters in Cork, Limerick, and Galway, Ireland; Chennai, India; and Taiwan, China, were all started by bringing home the diaspora from places like Silicon Valley. The Japanese Meiji miracle was kick-started by Satsuma students who had gone abroad to acquire expertise (see Cirera and Maloney 2017). Foreign direct investment and GVCs offer another way of bringing advanced knowledge to regions if actively engaged. A study of the drivers of technological transfer in Brazil, Senegal, and Vietnam (Cirera, Comin, and Cruz, forthcoming) finds that exposure to multinationals proved an important source of ideas, and the probability of being exposed to these ideas was higher in more technologically sophisticated regions (figure 8.4, panel a). Even with exposure to multinationals, as panel b of figure 8.4 indicates, whatever led to actual adoption of technologies also varies by region—suggesting, again, important missing complements in lagging regions. Establishing universities has also been as an important source of knowledge transfer. The land grant college system in the United States played a huge role in the transfer of new agricultural and mechanical technologies, particularly in the South. However, Kantor and Whalley (2019) find that the impact of these colleges has fallen over FIGURE 8.4 Lagging Regions Are Less Likely to Be Exposed to Multinational Corporations, and Such Exposure Is Associated with Better Adoption of Technology in Both Lagging and Leading Regions b. Exposure to multinationals and technology adoption
a. Exposure to information about technology through multinationals 2.5 Predicted probability of exposure
Predicted probability of exposure
35
30
25
20 Laggard
Leading
Multinational buyers or supplies
2.0
1.5
No
Yes
No
Yes
Laggard Leading Multinational buyers or suppliers of general business functions
Source: Cirera, Comin, and Cruz, forthcoming. Note: Leading regions are defined as those above the median average productivity. The technology adoption measure is regressed on the firm’s exposure to multinationals controlling for sector, size, country, and regions. All estimates are weighted by sampling and country weights. The tick-marks around the point estimates represent the 95 percent confidence intervals. These estimates are based on a sample of firms from Brazil, Senegal, and Vietnam.
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Place, Productivity, and Prosperity
