Uneven domestic knowledge bases and the success of foreign firms in the USA

Helena Barnard

Research Policy, 2008, vol. 37, issue 10, pages 1674-1683

Abstract: This paper investigates the effect of within-country and across-country inequalities on firms' FDI performance, and finds drivers of success in an advanced host economy (the USA) differ for firms from developed compared to developing countries. Returns to FDI for firms from developed countries are significantly correlated with home countries' level of economic development. In contrast, successful developing-country firms are from countries with lower within-country inequality, and reflect the industrial structure associated with developing countries: They are concentrated in scale-intensive industries and benefit especially from capital investment. The findings suggest that FDI reflects rather than disrupts unevenness in knowledge bases globally.

Keywords: Development; Inequality; Scale-intensive; industry; Human; capital (search for similar items in EconPapers)
Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:eee:respol:v:37:y:2008:i:10:p:1674-1683

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