Does Foreign Entry Spur Innovation?

Yuriy Gorodnichenko, Jan Svejnar and Katherine Terrell

No 9259, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Our estimates, based on large firm-level and industry-level data sets from eighteen countries, suggest that FDI and trade have strong positive spillover effects on product and technology innovation by domestic firms in emerging markets. The FDI effect is more pronounced for firms from advanced economies. Moreover, our results indicate that the spillover effects can be detected with micro data at the firm-level, but that using linkage variables computed from input-output tables at the industry level yields much weaker, and usually insignificant, estimated effects. These patterns are consistent with spillover effects being rather proximate and localized.

Keywords: innovation; FDI; spillovers; horizontal and vertical linkages; emerging markets; foreign competition (search for similar items in EconPapers)
JEL-codes: F23 M16 O16 P23 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2015-08
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse and nep-eff
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Does Foreign Entry Spur Innovation? (2015)
Working Paper: Does Foreign Entry Spur Innovation? (2015)
Working Paper: Does Foreign Entry Spur Innovation? (2015)
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