Discussion Paper Details
Please find the details for DP10757 in an easy to copy and paste format below:
Title: Does Foreign Entry Spur Innovation?
Author(s): Yuriy Gorodnichenko, Jan Svejnar and Katherine Terrell
Publication Date: August 2015
Keyword(s): emerging markets, FDI, foreign competition, horizontal and vertical linkages, innovation and spillovers
Programme Area(s): Industrial Organization, Labour Economics and Macroeconomics and Growth
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.
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Gorodnichenko, Y, Svejnar, J and Terrell, K. 2015. 'Does Foreign Entry Spur Innovation?'. London, Centre for Economic Policy Research. https://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10757