¹INSEAD, Singapore

Correspondence: J Singh, INSEAD, 1 Ayer Rajah Avenue, Singapore 138676. Tel: +65 6799 5341; Fax: +65 6799 5399; E-mail: jasjit.singh@insead.edu

Received 28 May 2004; Revised 15 September 2006; Accepted 22 September 2006; Published online 7 June 2007.

Abstract

We use patent citation data to examine knowledge flows between foreign multinational companies (MNCs) and host country organisations in 30 countries. We find not just significant knowledge inflows from foreign MNCs to host country organisations, but also significant outflows back from the host country to foreign MNCs. In fact, in technologically advanced countries, knowledge outflows to foreign MNCs greatly outweigh knowledge inflows. Even in technologically less advanced countries, knowledge outflows are only slightly weaker than inflows. Additional analysis shows that the exact pattern varies across sectors within a country, depending on the country's expertise in individual sectors. Finally, knowledge inflows and outflows appear to track personnel flows between foreign MNCs and host country organisations.