Globalization and knowledge spillover: international direct investment, exports and patents

Chia-Lin Chang (), Sung-Po Chen and Michael McAleer

Economics of Innovation and New Technology, 2013, vol. 22, issue 4, 329-352

Abstract: This paper examines, within the context of globalization, the impact of the main channels of international trade on domestic innovation, namely outward direct investment (ODI), inward direct investment (IDI), cross-border mergers and acquisitions (M&A) by foreigners, R&D expenditure, exports, and imports. The number of approved Triadic patents serves as a proxy for innovation. The data set contains 37 countries that are considered to be highly competitive in world markets, covering the period 1994--2005. The empirical results show that increased exports and ODI are able to stimulate an increase in approved patents. In contrast, IDI exhibits a negative correlation with domestic patents. Imports are shown not to have a significant impact on international technology spillovers. The paper shows that the impact of IDI on domestic innovation is characterized by two forces, namely the cross-border M&A by foreigners and remaining IDI, both of which are found to be negative.

Date: 2013
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Related works:
Working Paper: Globalization and Knowledge Spillover: International Direct Investment, Exports and Patents (2012)
Working Paper: Globalization and Knowledge Spillover: International Direct Investment, Exports and Patents (2010)
Working Paper: Globalization and Knowledge Spillover: International Direct Investment, Exports and Patents (2010)
Working Paper: Globalization and Knowledge Spillover: International Direct Investment, Exports and Patents (2010)
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DOI: 10.1080/10438599.2012.707412

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