TY  - JOUR
AU  - Gorodnichenko,Yuriy
AU  - Svejnar,Jan
AU  - Terrell,Katherine
TI  - Globalization and innovation in emerging markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14481
PY  - 2008
Y2  - November 2008
UR  - http://www.nber.org/papers/w14481
L1  - http://www.nber.org/papers/w14481.pdf
N1  - Author contact info:
Yuriy Gorodnichenko
Department of Economics
530 Evans Hall #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0720
Fax: 510/642-6615
E-Mail: ygorodni@econ.berkeley.edu

Jan Svejnar
Ross School of Business
  and Ford School of Public Policy
University of Michigan
735 South State Street, 3315 Weill Hall
Ann Arbor, MI 48109-1234
Tel: 734-936-5042
Fax: 734-763-5850
E-Mail: svejnar@umich.edu

Katherine Terrell
Ross School of Business 
 and Ford School of Public Policy
University of Michigan 
3234 Weill Hall, 735 South State Street  
Ann Arbor, MI 48109 
E-Mail: terrell@umich.edu
AB  - Globalization brings opportunities and pressures for domestic firms in emerging markets to innovate and improve their competitive position. Using data on firms in 27 emerging market economies, we estimate the effects of foreign competition, vertical linkages with foreign firms, and international trade on several types of innovation by domestic firms. Using instrumental variables and a battery of checks, we provide robust evidence of a positive relationship between foreign competition and innovation and show that the supply chain of multinational enterprises and international trade are also important channels. There is no evidence for an inverted U relationship between innovation and foreign competition. The relationship between globalization and innovation does not differ across the manufacturing and service sectors.
ER  -