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The inherent technical capability of a domestic economy has a significant effect upon trade. In addition, the innovation achievement potential of foreign countries and their companies may also enhance a given situation. International trade and foreign direct investment (FDI) provide knowledge transmission channels for innovation and research and development spillovers. Applying a Panel Analysis for the period 1990 to 2008, this study examines the bilateral export flows of Germany with the remaining 31 OECD countries. Using an extended gravity model the study investigates which influence the trade partners’ innovation potential, as well as the research intensity of foreign multinational companies (MNCs) has upon German exports. The novel aspect of this study is the introduction of a direct measure for knowledge spillover. The findings show, that the trade partners’ innovation potential as well as their FDI has a significant positive influence upon trade. In particular, the more innovative a foreign MNC located in Germany is, the greater the amount of German exports.

jahrbücher für nationalökonomie und statistik

Technologiestandort Deutschland und internationale Wissensspillover / Technology Site Germany and International Knowledge Spillovers: Welchen Einfluss nehmen ausländische MNU auf deutsche Exporte? / What Effect do Foreign MNCs have on German Exports?