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Heterogeneous foreign direct investment and local innovation in Italian Provinces

Andrea Ascani (), Pierre-Alexandre Balland and Andrea Morrison ()

Structural Change and Economic Dynamics, 2020, vol. 53, issue C, 388-401

Abstract: Locations all over the world compete to attract Foreign Direct Investment (FDI) in order to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI, little is known about (1) its effect on neighbouring regions and (2) the type of FDI generating the strongest learning effects. To fill this gap, we investigate the FDI-innovation relationship in Italian provinces. By adopting the Pavitt taxonomy of manufacturing sectors, we suggest that only specific categories of FDI benefit local economies, whilst other types may produce negative outcomes. The evidence on the spatial implications of FDI remains limited.

Keywords: Foreign direct investment; Spillovers; Pavitt taxonomy; Inter-sectoral linkages; FDI heterogeneity; Italy (search for similar items in EconPapers)
JEL-codes: F23 F63 O3 R11 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:53:y:2020:i:c:p:388-401

DOI: 10.1016/j.strueco.2019.06.004

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Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

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