Ross School of Business
and Ford School of Public Policy
University of Michigan
3234 Weill Hall, 735 South State Street
Ann Arbor, MI 48109
Institutional Affiliation: University of Michigan
Information about this author at RePEc
NBER Working Papers and Publications
|September 2015||Does Foreign Entry Spur Innovation?|
with , : w21514
Using large firm-level and industry-level data sets from eighteen countries, we find that foreign direct investment (FDI) and trade have 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. However, while we detect the spillover effects with micro data at the firm-level, when we use linkage variables computed from input-output tables at the industry level we find much weaker, and usually insignificant, effects. These patterns are important for policy, suggesting that spillovers are localized to firms engaged directly with multinationals and in trade, rather than affecting all domestic firms in industries with FDI presence.
|November 2008||Globalization and innovation in emerging markets|
with , : w14481
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 manufa...
Published: Yuriy Gorodnichenko & Jan Svejnar & Katherine Terrell, 2010.
"Globalization and Innovation in Emerging Markets,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 2(2), pages 194-226, April.
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