TY  - JOUR
AU  - Burstein,Ariel
AU  - Monge-Naranjo,Alexander
TI  - Foreign Know-How, Firm Control, and the Income of Developing Countries
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13073
PY  - 2007
Y2  - May 2007
UR  - http://www.nber.org/papers/w13073
L1  - http://www.nber.org/papers/w13073.pdf
N1  - Author contact info:
Ariel Burstein
Department of Economics
Bunche Hall 8365
Box 951477
UCLA
Los Angeles, CA 90095-1477
Tel: 310/206-6732
Fax: 310/825-9528
E-Mail: arielb@econ.ucla.edu

Alexander Monge-Naranjo
Department of Economics
Weinberg College of Arts and Sciences
Northwestern University
Andersen Hall 3247, 2003 N. Sheridan Rd.
Evanston, Illinois 60202
Tel: 847/491-8234
Fax: 847/491-7001
E-Mail: alexmonge@gmail.com
AB  - Managerial know-how shapes the productivity of firms by defining the set of available technologies, production choices, and market opportunities. This know-how can be reallocated across countries as managers acquire control of factors of production abroad. In this paper, we construct a quantitative model of cross-country income differences to study the aggregate consequences of international mobility of managerial know-how. We use the model and aggregate data to infer the relative scarcity of this form of know-how for a sample of developing countries. We also conduct policy counterfactuals and find that on average, developing countries gain up to 23% in output and 9% in consumption when they eliminate all barriers to foreign control of domestic factors of production.
ER  -