Essays on multinationals, international trade, and technology spillover

This thesis consists of five chapters. Chapter 1 introduces my aims and methodology of studies.; The second chapter builds a model of vertical multinational firms with endogenous spillover that explains recent empirical findings. The model emphasizes industry characteristics as well as country characteristics in a small open general equilibrium framework. The model has two main predictions. First, vertical multinational firm behavior is consistent with comparative advantage across industries and skilled labor abundance of a host economy. Second, the degree of competition between multinationals and local firms explain the degree of benefits from FDI and why only low-tech sectors have spillover effects in developing countries.; The third chapter analyzes horizontal and vertical differences empirically. Using the implications of Markusen and Venables (1998)'s horizontal multinational enterprise (MNE) model, samples of U.S. multinational activities are separated into either horizontal or vertical MNEs. The results show that the majority of the U.S. NINE sample are horizontal MNEs. I also estimate the determinants of MNE strategies and the spillover effect on host economies. The results indicate that the vertical MNEs tend to export back to the U.S. market more than the horizontal MNEs. Skilled labor abundance, the number of employee, and average size of firm play an important role to determine the magnitude of spillover effect.; The forth chapter investigates the R&D spillovers among domestic and tradable sectors. This chapter focuses on the aspect, of externalities between the tradable and nontradable sectors. The other purpose of this chapter is to test for the statistical similarity of East Asian countries. In so doing, I modify the multi-sector framework and estimate the reduced forms using pooled data comprised of 51 countries over 24 years. Empirical results clearly show that some Asian countries can be regarded as one group in terms of the magnitude of the productivity spillover effect. I find statistical differences in the estimated parameters between East Asian countries, developed countries, and developing countries, with the East Asian countries showing the highest spillover effects.; The fifth chapter concludes the study.