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Chi Keung Lau, Fu Steve Yang (), Zhe Zhang () and Vincent K. K. Leung ()
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Fu Steve Yang: School of Management, Centennial College, 3 Wah Lam Path, Pokfulam, Hong Kong
Zhe Zhang: Department of Management, Marketing and International Business, School of Business, Eastern Kentucky University, Kentucky, USA
Vincent K. K. Leung: Department of Marketing, School of Business, Hong Kong Baptist University, Hong Kong

The Singapore Economic Review (SER), 2015, vol. 60, issue 01, 1-18

Abstract: Recent studies in the innovation literature show that Foreign Direct Investment (FDI) enhances innovations in recipient countries through spill-over effects. In this paper we extend the existing literature by incorporating the corruption index in the estimation procedure. Using a cross-country analysis from the Europe and Central Asia (ECA) region, covering 57 countries over the period of 1995–2010, we find no evidence of FDI spill-over effects on innovations, when corruption is endogenously modelled in the regression. Interestingly, we find that corruption and expenditure on education sector are positively related to the number of patents applications, suggesting anti-corruption programs encourage innovations that promote economic growth. Our study shed light on the national innovations and anti-corruption programs.

Keywords: Foreign direct investment; corruption; innovation; technology transfer; O32; O34; O38; F21; D73 (search for similar items in EconPapers)
Date: 2015
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Working Paper: Determinants of Innovative Activities: Evidence from Europe and Central Asia Region (2013) Downloads
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DOI: 10.1142/S0217590815500046

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