International Technology Diffusion: Evidence from Swedish Patent Data

Using references in Swedish patent data, we examine technology sourcing in Swedish multi‐national enterprises (MNEs) and non‐multinational small and medium‐sized enterprises (SMEs). The results show that both types of firms are more likely to make references to countries with large patent stocks and to countries that are located close to Sweden. Trade and FDI also seem to facilitate the transfer of foreign technology to Sweden. However, trade contacts seem to be more important for technology sourcing in SMEs than in MNEs. Outward Foreign Direct Investment (FDI) is a channel for the diffusion of foreign technology to both home‐country MNEs and SMEs.