R&D and technology spillovers via FDI: Innovation and absorptive capacity

Yuko Kinoshita

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: Two faces of R&D (innovation and learning) and technology spillovers from FDI (foreign direct investment) on a firm's productivity growth are examined in this paper. Using firm-level panel data on Czech manufacturing firms between 1995 and 1998, I find that: First, the learning effect of R&D is far more important than the innovative effect in explaining the productivity growth of a firm. Second, there is no evidence of technology spillovers to local firms from having a foreign joint venture partner. Third, positive spillovers from FDI are found in electrical machinery and radio & TV sectors, which are also active investors in innovative R&D.

Date: 2000-11
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