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Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces

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

No 1820, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

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) which type of FDI generate relevant 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; FDI heterogeneity (search for similar items in EconPapers)
JEL-codes: O3 F23 R11 F63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-eur, nep-geo, nep-ino, nep-int, nep-sbm and nep-ure
Date: 2018-05, Revised 2018-05
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1820

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