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FDI Spillover Effects on Innovation Activities of Knowledge-using and Knowledge-creating Firms: Evidence from an Emerging Economy

Iraj Hashi, Mehtap Hisarciklilar, Slavo Radosevic, Nebojsa Stojcic and Nina Vujanovic

No 213, wiiw Working Papers from The Vienna Institute for International Economic Studies, wiiw

Abstract: The beneficial effects of innovation for firms’ performance and competitiveness are well documented, but it has been suggested in recent years that innovation regimes differ between advanced and emerging economies. While advanced economies rely on knowledge generation, their emerging counterparts follow mainly a knowledge-use regime through the application of existing knowledge and technology. Climbing up the technological ladder can be helped through spillovers from foreign investors to local firms. We investigate whether FDI spillovers influence different phases of the innovation process (from decision to innovate to productivity) among knowledge-using and knowledge-creating firms in an emerging European economy. The results show that the innovation process in emerging economies is closer to the imitation than the creation of novel products. Local firms benefit from foreign counterparts in the early phase of the innovation process. Stronger FDI effects are found among firms that undertake innovation through knowledge use rather than through knowledge generation.

Keywords: knowledge use; knowledge generation; FDI; innovation; emerging economy (search for similar items in EconPapers)
JEL-codes: C31 F21 F23 L21 L25 (search for similar items in EconPapers)
Pages: 29 pages including 3 Tables
Date: 2022-03
New Economics Papers: this item is included in nep-ban, nep-cse, nep-eff, nep-ino, nep-int, nep-knm, nep-sbm and nep-tid
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Citations: View citations in EconPapers (16)

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Journal Article: FDI spillover effects on innovation activities of knowledge using and knowledge creating firms: Evidence from an emerging economy (2022) Downloads
Working Paper: Fdi spillover effects on innovation activities of knowledge using and knowledge creating firms: evidence from an emerging economy (2022) Downloads
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