Maria Garcia-Vega

"Trust and Technology Transfers" (with E. Huergo)

Abstract:
Research and development is largely perform by multinational companies that transfer technology to their foreign subsidiaries. In this paper, we investigate empirically whether trust into the host economy influences the technology transfers that subsidiaries receive from their business group. We use firm level data on R&D imports from foreign subsidiaries operating in Spain for the period 2005 to 2012, and a measure of trust between citizens of European countries from the Eurobarometer. We find that trust into the host country reduces technology transfers within the business group. However, trust increases technological imports that subsidiaries obtain through market channels. This result is consistent with the idea that a subsidiary located in a trustful country enjoys more autonomy to obtain foreign technologies.