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Knowledge Spillovers, the Technology Frontier and High-Tech FDI - Evidence from Finland*

Pii Berghäll ()

Finnish Economic Papers, 2017, vol. 28, issue 1, 34-49

Abstract: The link between foreign direct investment (FDI) and the technology frontier is strong in the theoretical and empirical literature, particularly for high-tech multinational corporations. Policymakers aiming to harness local high-tech clusters therefore tend to cherish high-tech inward FDI. It is not clear whether they should. With an unbalanced panel of Finnish ICT manufacturing firms for 1993–2003, I identify the direction of knowledge spillovers by comparing the technical efficiencies of foreign and indigenous firms with DEA and order-m methodology. When knowledge spillovers flow predominantly to foreign firms, innovation policy seeking to accelerate them may accelerate the net loss of strategic assets.

JEL-codes: L63 O33 O47 O52 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:fep:journl:v:28:y:2017:i:1:p:34-49