The project studies how knowledge flows from countries on the technology frontier to Hungary and similar Central and Eastern European countries. For example, a Hungarian firm may reach the frontier by importing advanced-technology equipment and employing foreign managers or experts. The firm might also advance as its managers or workers learn from their peers. Currently, such knowledge flows are poorly understood because links among firms and workers –let alone knowledge transfers –are hard to measure. The research team of several Hungarian economists led by Koren will exploit existing data in innovative ways and conduct a large cross-country survey to ask firms about their inflow of foreign knowledge. This research can 1) help determine if countries on the European periphery can catch up to the technological leaders and 2) identify the most effective methods. The data will also enable researchers to evaluate how trade and immigration policies affect the country’s long-run growth potential.