Specialized technology suppliers, international spillovers and investment: evidence from the chemical industry

In this paper we study how the development of specialized upstream technology suppliers in leading countries improves technology access and lowers investment costs for downstream firms in follower countries. We test this idea using a novel database covering all investments in chemical plants in less developed countries ŽLDCs. during the 1980s. We find that investments in chemical plants in the LDCs are greater, the greater is the number of technology suppliers that operate in the first world. A major contribution of this paper is to identify an important but understudied mechanism through which technology is made available.Thank the italian Ministry of University and Scientific Research ŽMURST., and CNR ŽCommittees 10 and 11. for financial support. Financial support from the European Union, DG XII, TSER Project N.SOE1-CT97-1059.Publicad