The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Research shows that international trade is an important channel for the transfer of technology. Building on this evidence, this paper examines the effects of inter- and intraindustry trade on technology transfer. The paper develops and tests the hypothesis that intraindustry trade stimulates more technology transfer than interindustry trade because countries are likely to absorb foreign technologies more easily when their imports are from the same sectors as their production and export sectors. The results of empirical tests for 87 countries during 1970–93 support this hypothesis.