Formal Institutions and International Knowledge Transfer

This paper adopts a systematic review method to summarize the major economic literature on the topics of international knowledge transfer. We pay special attention to studies exploring the role that formal institutions may have in guiding, intensifying, and enhancing international knowledge transfer in, to, and from emerging markets. Our findings identify five main transfer channels that we believe are predominant in the literature. The first refers to the role of multinational enterprises, and how industrial links affect international knowledge transfer through inward and outward foreign direct investment. The second addresses the effect of R&D internationalization on firm innovation performance. The third deals with the idea that firms learn from international trade and benefit from links with foreign markets by introducing either new products or processes. The fourth focuses on international collaborations and networks. Finally, the fifth addresses the human capital international mobility of managers and employees. However, the complex nature of these topics claims the need for supplementary studies that can help to further develop this theme.