@techreport{NBERw13515,
 title = "Openness, Technology Capital, and Development",
 author = "Ellen McGrattan and Edward C. Prescott",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "13515",
 year = "2007",
 month = "October",
 URL = "http://www.nber.org/papers/w13515",
 abstract = {In this paper, we extend the growth model to include firm-specific technology capital and use it to assess the gains from opening to foreign direct investment. A firm's technology capital is its unique know-how from investing in research and development, brands, and organization capital.  What distinguishes technology capital from other forms of capital is the fact that a firm can use it simultaneously in multiple domestic and foreign locations. Foreign technology capital is exploited by permitting foreign direct investment by multinationals.  In both steady-state and transitional analyses, the extended growth model predicts large gains to being open.},
}