Exploring the impact of national system of innovation on the outcomes of foreign direct investment

Angathevar Baskaran () and Mammo Muchie

International Journal of Technological Learning, Innovation and Development, 2009, vol. 2, issue 4, 314-345

Abstract: This paper attempts to explore the possible relationship between the characteristics of a National System of Innovation (NSI) and their impact on Foreign Direct Investment (FDI) outcomes, particularly in developing countries. We employ a heuristic NSI-FDI conceptual framework linking the robustness of NSI to the benefits or lack of it from FDI. We create a taxonomy of NSIs as well-functioning/strong, relatively well-functioning and weak and try to empirically find out how each NSI type is related to the corresponding FDI outcomes. We examine whether a strong NSI can bring a high-end benefit from FDI, whether those with a weak NSI are at the low end of the FDI potential benefit spectrum, and whether a relatively well-functioning NSI is linked to medium or average FDI outcomes. We used descriptive data from selected developing economies – China, India, South Africa, Ghana, Ethiopia, Tanzania and Zambia – and applied this conceptual framework. Despite some data limitations, our case studies show that the characteristics and robustness (or lack of robustness) of NSI can impact on how FDI flows to a country and the kinds of outcomes it will produce, other things being equal. Therefore, how countries build their NSI matters significantly to national policy making.

Keywords: foreign direct investment; FDI; national systems of innovation; NSI; technology spillovers; China; India; South Africa; Ghana; Ethiopia; Tanzania; Zambia; developing countries. (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.inderscience.com/link.php?id=26820 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijtlid:v:2:y:2009:i:4:p:314-345

Access Statistics for this article

More articles in International Journal of Technological Learning, Innovation and Development from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().