Foreign Technology Acquisition and Changes in the Real Exchange Rate. (31st January 2015)

• Record Type: Journal Article
• Authors: Alvarez, Roberto; López, Ricardo A.
• Is Part Of: World economy. Volume 38:Number 4(2015:Apr.)
• Page Start: 613
• Page End: 628
• Publication Date: 2015-01-31
• Subjects: International economic relations -- Periodicals; 330
• DOI: 10.1111/twec.12253
• Languages: English
• ISSNs: 0378-5920

Abstract

<abstract abstract-type="main" id="twec12253-abs-0001"> <title>Abstract</title> <p>This paper uses plant‐level data from the manufacturing sector of Chile to investigate how changes in the real exchange rate affect the decision to purchase foreign technologies through licensing. Theoretically, a real depreciation has an ambiguous effect on foreign technology adoption. On the one hand, a real depreciation makes exports more competitive, and as exporters tend to adopt and use more advanced technologies, we should observe a higher propensity to import technologies among them. On the other hand, a real depreciation can also make imports of technology relatively more expensive. Thus, this question must be examined empirically. The empirical analysis shows that a real depreciation significantly increases the probability of using foreign technology licences for plants that export and for plants in the intermediate range of the size and productivity distribution.</p> </abstract>