In this work, I study the key drivers of innovation and technology diffusion in a multi- country setting. Nowadays, innovation, particularly in green technologies, is concentrated in developed countries and spreading it globally is at the top of the agenda for most policy makers in the world. I am able to identify specific channels which can help redirecting R&D and green technologies towards developing countries as well. I, first, develop a theoretical model of directed technical changes to compare the effectiveness of two unilateral policies available to countries that want to rapidly curb global carbon emissions, but do not own fossil fuel resources. The second and third chapters are empirical studies. In the second chapter I look at the role that Intellectual Property Rights protection plays in the decision of multinational corporations to locate their R&D activities abroad. Finally, in my third chapter, I study responses of the steel plant location to increase in coal prices, distinguishing between two types of steel- making technologies: a green and a dirty one.