Damijan, Joze P. and Kostevc, Crt and Rojec, Matija (2010) Does a foreign subsidiary's network status affect its innovation activity? Evidence from post-socialist economies. [Working Paper or Technical Report]
Official URL: http://eprints.ucm.es/10861/1/WP_06-10.pdf
A detailed questionnaire survey among 809 foreign subsidiaries in five post-socialist economies (East Germany, Poland, Romania, Slovenia and Croatia) is used to study determinants of innovation activity of foreign subsidiaries. Survey data comprise traditional firm innovation activity determinants and indicators of a foreign subsidiary status. Our findings demonstrate that foreign subsidiaries are relatively independent as far as innovation activity is concerned, while at the same time subsidiaries with better access to foreign parent companies R&D results are more likely to innovate. Important differences, however, are found in factors that determine product and process innovation: (i) subsidiaries that invest more in R&D exhibit higher probability for product but not for process innovation; (ii) acquisition of external knowledge and company size have significant and positive impact on on process innovation only, (iii) transfer of responsibilities from headquarters to subsidiaries and foreign investor being a MNE is conducive to process innovation; (iv) marketseeking motivation of foreign investors has a negative impact on product innovation status; (v) higher age of subsidiary is positive for its process innovation, i.e. a foreign investor needs some time to initiate innovation activities in a subsidiary.
|Item Type:||Working Paper or Technical Report|
|Uncontrolled Keywords:||Transnational firms, Direct inversion, Networks, Innovation activity, Post-socialist economies.|
|Subjects:||Social sciences > Economics > Economic integration|
Social sciences > Economics > Industrial organization
Social sciences > Economics > World economy
Social sciences > Economics > Business enterprises
|Series Name:||Working Papers|
Abraham, F., J. Konings and V. Slootmaekers (2006), FDI Spillovers, Firm Heterogeneity and Degree of Ownership from Chinese manufacturing. Catholic University Leuven, Mimeo.
Aghion, P. and P. Howitt (1992), “A Model of Growth through Creative Destruction”, Econometrica, 60:323-351.
Aghion, P. and P. Howitt (1998), Endogenous Growth Theory. Cambridge, MA: MIT Press.
Aitken, B.J. and A.E. Harrison (1999), “Do Domestic Firms Benefit from Direct Foreign Investments? Evidence from Venezuela”, American Economic Review, 89: 605-618.
Allen, T (1986), Managing the Flow of Technology. Cambridge, MA: MIT Press.
Almeida, R. and A.M. Fernandes (2006), “Openness and Technological Innovations in Developing Countries: Evidence from Firm-Level Surveys”. World Bank Policy Research Working Paper No. WPS3985.
Altenburg, T. (2000), “Linkages and Spillovers between Transnational Corporations and Small and Medium- Sized Enterprises in Developing Countries: Opportunities and Best Policies”, In UNCTAD, TNC-SME Linkages for Development: Issue-Experiences-Best Practices. Geneva: United Nations.
Alverez, I., J.P. Damijan, and M. Knell (2002), Do Spanish Firms Get Technology through FDI and Trade? University of Madrid, Madrid. Mimeo.
Arnold, J.M. and B. Smarzynska Javorcik (2005), “Gifted Kids or Pushy Parents? Foreign Acquisitions and Plant Productivity in Indonesia”, World Bank Policy Research Working Paper, No. 3597.
Aw, B.Y., X. Chen and M.J. Roberts (1998), “Productivity and the Decision to Export: Micro Evidence from Taiwan and South Korea”, NBER Working Paper No. 6558.
Balasubramanyan, V.N., M. Salisu and D. Sapsford (1996), “Foreign Direct Investment and Growth in EP and IP Countries”. Economic Journal, 106: 92-105.
Balasubramanyan, V.N., M. Salisu and D. Sapsford (1999), “Foreign Direct Investment as an Engine of Growth”, Journal of International Trade and Economic Development, 8: 27-40.
Balcet, G. and R. Evangelista. (2005), “Global Technology: Innovation Strategies of Foreign Affiliates in Italy”, Transnational Corporations, 14: 53-92.
Barry, F., H. Görg, and E. Strobl (2002), Productivity Spillovers and Labour-Market Crowding Out: Interactions between Foreign and Domestic Firms in Irish Manufacturing, University College Dublin. Mimeo.
Bartlett, C.A. (1986), “Managing and Building the Transnational: The New Organizational Challenge. In M.E”, Porter ed., Competition in Global Industries, Cambridge: Harvard Business School Press. 367-401.
Bartlett, C.A. and S. Ghoshal (1989), Managing across Borders: The Transnational Solution. Cambridge, Harvard Business School Press.
Belderbos, R., G. Campannelli and K. Fukao (2001), “Backward Vertical Linkages of Foreign Manufacturing Affiliates: Evidence from Japanese Multinationals”, World Development, 29(1): 189-208.
Birkinshaw, J and N. Hood (eds.) (1998), Multinational Corporate Evolution and Subsidiary Development, New York: St Martins Press.
Birkinshaw, J., N. Hood, and S. Jonsson (1998),“Building Firm-Specific Advantages in Multinational Corporations: the Role of Subsidiary Initiative”. Strategic Management Journal, 23(4): 773-795.
Birkinshaw, J.M. and A. Morrison (1995), “Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations”, Journal of International Business Studies, 26: 729-754.
Blalock, G. (2001), Technology from Foreign Direct Investment: Strategic Transfer through Supply Chains, University of California, Berkeley. Mimeo. 24
Blomström, M. (1986), “Foreign Investment and Productive Efficiency: the Case of Mexico”. Journal of Industrial Economics, 15: 97-110.
Blomström, M., R.E. Lipsey and M. Zejan (1994), “What Explains Developing Country Growth?” NBER Working Paper No. 4132. National Bureau of Economic Research, Cambridge, MA.
Blomström, M. and F. Sjöholm (1999), “Technology Transfer and Spillovers: Does Local Participation with Multinationals Matter?” European Economic Review, 43: 915-923.
Blomström, M. and E. Wolff (1994), “Foreign investment enterprises and productivity convergence in Mexico”, In W. Baumol, R. Nelson, and E. Wolff, eds., Convergence of Productivity: Cross-national Studies and Historical Evidence, Oxford: Oxford University Press.
Borensztein, E., J. De Gregorio, and J.W. Lee (1998), “How Does Foreign Direct Investment Affect Economic Growth?” Journal of International Economics, 45: 115-135.
Buckley, P. J. and M. Carter (2004), “A Formal Analysis of Knowledge Combination in Multinational Enterprises”, Journal of International Business Studies, 35: 371-384.
Buckley, P.J. and M. Casson (1976), “The Future of the Multinational Enterprise”, London: Macmillan. Cameron, G. (1996), Catchup and Leapfrog between the USA and Japan. Chapter 6 of D. Phil. Thesis, Nuffield College, University of Oxford, Oxford. Mimeo.
Cameron, G., J. Proudman, and S. Redding (1998), “Productivity Convergence and International Openness”. In J. Proudman and S. Redding (eds.), Openness and Growth, London: Bank of England. Chapter 6.
Cantwell, J. (1989), “Technological Innovation and Multinational Corporations. Oxford: Basil Blackwell.
Cantwell, J. and J. Molero (2003), Introduction. In J. Cantwell and J. Molero (eds.), “Multinational Enterprises, Innovative Strategies and Systems of Innovation”. Cheltenham: Edward Elgar. p.p.: 1-14.
Castellani, D. and A. Zanfei (2003), “Technology Gaps, Absorptive Capacity and the Impact of Inward Investments on Productivity of European Firms”, Economics of Innovation and New Technology, 12: 555-576.
Coase, R. H. (1937), “The Nature of the Firm”, Economica, 4: 386-405.
Coe, D. and E. Helpman (1995), “International R&D Spillovers”, European Economic Review, 39: 859-887.
Coe, D., E. Helpman, and A. Hoffmaister (1997), “North-South R&D Spillovers”, Economic Journal, 107: 134-149.
Cohen W. M. and D.A. Levinthal (1989), “Innovation and Learning: The Two Faces of R&D”, Economic Journal, 99: 569-596.
Cohen, W.M. and D.A. Levinthal (1990), “Absorptive capacity: A new perspective on learning and innovation”, Administrative Science, 35, 128-52.
Couto, J.P., V.F. da Conceicao Goncalves and M.J. Amaral Fortuna (2003), “Strategic Choice of the Subsidiaries: Contextual and Operational factors”, Journal of Comparative International Management, 6 (1): 57-70.
Damijan, J., A. Jaklič and M. Rojec (2006), “Do External Knowledge Spillovers Induce Firms' Innovations? Evidence from Slovenia”. In A.T. Tavares and A. Teixeira (eds.), Multinationals, Clusters and Innovation: Does Public Policy Matter? Basingstoke: Palgrave, 27-47.
Damijan, J.P., M. Knell, B. Majcen and M. Rojec (2003a), “The Role of FDI, R&D Accumulation and Trade in Transferring Technology to Transition Countries: Evidence from Firm Panel Data for Eight Transition Countries”, Economic Systems, 27: 189-204.
Damijan, J.P., M. Knell, B. Majcen and M. Rojec (2003b), “Technology Transfer through FDI in Top-10 Transition Countries: How Important are Direct Effects”, Horizontal and Vertical Spillovers”. William Davidson Working Paper No. 549 (February). Ann Arbor: The University of Michigan Business School. 25
De Loecker, J. (2005) “Do Exports Generate Higher Productivity? Evidence from Slovenia”, Working Paper presented at EIIE Conference. Ljubljana.
Dhanaraj, C., M.A. Lyles, H.K. Steensma and L. Tihanyi (2004) “Managing Tacit and Explicit Knowledge Transfer in IJVs : The Role of Relational Embeddedness and the Impact on Performance”, Journal of International Business Studies, 35: 428-442.
Dunning, J.H. (1993)“Multinational Enterprises and the Global Economy”, Wokingham: Addison Wesley.
Eaton, J. and S. Kortum (1996), “Trade in Ideas: Patenting and Productivity in the OECD”, Journal of International Economics, 40: 251-271.
Eaton, J. and S. Kortum (2001), “Trade in Capital Goods”, European Economic Review, 45: 1195-1235.
Ebersberger, B. and H. Lőőf (2005), “Corporate Innovation Activities, Does Ownership Matter? The CIS Study Statistical Report”, Nordic Innovation Centre’s Forum for Innovation Policies, Oslo.
Egelhoff, W., L. Gorman and S. McCormick (1998), “Using Technology as a Path to Subsidiary Development. In J. Birkinshaw and N. Hood (eds.), Multinational Corporate Evolution and Subsidiary Development”, New York: St Martins Press, 213–238.
Ernst, D. (1998), Globalization, Convergence, and Diversity: “The Asian Production Networks of Japanese
Electronic Firms. In D. Ernst and S. Haggard (eds.), Rivalry or Riches: International Production Networks in Asia”, Ithaca, NY: Cornell University Press. European Union (2008), “CREST Report. Internationalisation of R&D. Facing the Challenges of Globalisation: Approaches to a Proactive International Policy in S&T”, Brussels: Scientific and Technical Research Committee.
Falk, M. and R. Falk (2006), “Do Foreign-Owned Firms Have a Lower Innovation Intensity than Domestic Firms? ” WIFO Working Papers No. 275, Austrian Institute of Economic Research, Vienna.
Feenstra, R., J. Markusen, and W. Zeile (1992), “Accounting for Growth with New Inputs: Theory and Evidence”, American Economic Review, 82: 415-421.
Findlay, R. (1978), “Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model”, Quarterly Journal of Economics, 92: 1-15.
Frenz, M. and G. Ietto-Gilles (2007), “The relevance of internal and external sources of knowledge in the innovation performance of UK enterprises, EIBA Conference.
Girma, S., Y. Gong and H. Gőrg (2006), “Can you Teach Old Dragons New Tricks? FDI and Innovation Activity in Chinese State-Owned Enterprises, University of Nottingham, Nottingham. Mimeo.
Girma, S. and H. Görg (2002), “Foreign Direct Investment, Spillovers and Absorption Capacity: Evidence from Quantile Regressions”, GEP ResearcH Paper 02/14, University of Nottingham, Nottingham.
Girma, S., D. Greenaway, and K. Wakelin (2001), “Who Benefits from Foreign Direct Investment in the UK?”, Scottish Journal of Political Economy, 48: 119-133.
Glass, A. and K. Saggi (1998), “International Technology Transfer and the Technology Gap”, Journal of Development Economics, 55: 369-398.
Gorodnichenko, Y., J. Svejnar and K. Terrell (2006), Vertical and Horizontal FDI spillovers in Transition Economies: Do Institutions Matter?, Mimeo.
Graham, E.M. and P.R. Krugman (1989), “Foreign Direct Investment in the United States”, Washington, D.C.: Institute for International Economics.
Greenaway, D. and R. Kneller (2007), “Firm heterogeneity, exporting and foreign direct investment”. The Economic Journal, 117: 134-161. 26
Griffith, R., S. Redding and H. Simpson (2004), “Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab”, CEP Discussion Paper No 649 (September), Centre for Economic Performance, London School of Economics and Political Science, London.
Grossman, G. and E. Helpman (1991), “Innovation and Growth in the Global Economy”, Cambridge: MIT Press.
Gűnther, J. (2006), “Determinants of Innovation – Does Foreign Ownership Matter in Eastern Germany”. Paper presented at EACES 9th Bi-Annual Conference: Development Strategies – A comparative View, 7-9 September, Brighton.
Gupta, A.K. and V. Govindarajan (1994), “Organizing for Knowledge Flows within MNCs”, International Business Review, 3(4): 443-457.
Haddad, M. and A. Harrison (1993), “Are There Positive Spillovers from Direct Foreign Investments? Evidence from Panel Data for Morocco”, Journal of Development Economics, 42: 51-74.
Halpern, L. and B. Murakozy (2006), Does Distance Matter in Spillover?, Hungarian Academy of Sciences, Institute of Economics, CEU Department of Economics, Budapest. Mimeo.
Haskel, J., S. Pereira and M. Slaughter (2001), “Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?”, Paper presented at the NBER Summer Institute. August.
Hoekman, B. and B. Smarzynska Javorcik (2006), “Lessons from Empirical Research on International Technology Diffusion through Trade and Foreign Direct Investment”, In B. Hoekman and B. Smarzynska Javorcik eds., Global Integration and Technology Transfer. Washington, D.C.: World Bank, 1-26.
Hoppe, M. (2005), “Technology Transfer through Trade”, Nota di Lavoro 19.2005. Fondazione Eni Enrico Mattei, Milano.
Imbriani, C. and F. Reganati (1997), “International Efficiency Spillovers into the Italian Manufacturing Sector – English Summary”, Economia Internazionale, 50: 583-595.
Keller, W. (2002), “Trade and the Transmission of Technology”, Journal of Economic Growth, 7: 5-24.
Keller, W. (2004), International Technology Diffusion, University of Texas, National Bureau of Economic Research, Centre for Economic policy Research. Mimeo.
Keller, W. And S.R. Yeaple (2003), “Multinational Enterprises, International Trade, and Productivity Growth: Firm Level Evidence from The United States”, NBER Working Paper No. 9504 (February). National Bureau of Economic Research, Cambridge, MA.
Kinoshita, Y. (2000), R&D and Technology Spillovers via FDI: Innovation and Absorptive Capacity, CERGEEI, Prague. Mimeo.
Kinoshita, Y. and C-H. Lu (2006), “On the Role of Absorptive Capacity: FDI Matters to Growth”, William Davidson Institute Working Paper No. 845 (August). Ann Arbor: University of Michigan.
Kneller, R. and P.A. Stevens, (2006), “Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries”, Oxford Bulletin of Economics and Statistics, 68 (1): 1-21.
Kojima. K. (1978), “Direct Foreign Investment : a Japanese Model of Multinational Business Operations”, London: Croom Helm.
Kojima, K. and T. Ozawa (1985), “Toward a Theory of Industrial Restructuring and Dynamic Comparative Advantages”, Hitotsubashi Journal of Economics, 26: 1-20.
Kokko, A. (1994), “Technology, Market Characteristics, and Spillovers”, Journal of Development Economics, 43: 279-293.
Kokko, A. and M. Blomström (1995), “Policies to Encourage Inflows of Technology through Foreign Multinationals”, World Development, 23: 459-468. 27
Kokko, A. and V. Kravtsova (2008), “Innovative capability in MNC subsidiaries: Evidence from four European transition economies”, Post-Communist Economies, 20 (1): 57-75.
Kokko, A., R. Tansini and M. Zejan (1996), “Local Technological Capability and Spillovers from FDI in the Uruguayan Manufacturing Sector”, Journal of Development Studies, 34: 602-611.
Kosova, R. (2006), Do Foreign Firms Crowd Out Domestic Firms: Evidence from the Czech Republic, (March) Available at SSRN: http://ssrn.com/abstract=891776
Kraay, A., I. Soloaga and J. Tybout (2001), Product, Quality, Productive Effciency, and International Technology Diffusion: Evidence from Plant-Level Panel Data, Paper presented at the NBER Summer Institute.
Lane, P.J., E.J. Salk and M.A. Lyles (2001), “Absorptive Capacity, Earning, and Performance in International Joint Ventures”, Strategic Management Journal, 22: 1139-1161.
Levy, D. and J.H. Dunning (1993), “International Production and Sourcing: Trends and Issues”, STI Review, No. 13: 13-59.
Lim, E-G. (2001), “Determinants of, and the Relation Between Foreign Direct Investment and Growth: A Summary of the Recent Literature”, IMF Working Paper WP/01/175.
Lumenga-Neso, O., M. Olarreaga and M. Schiff (2001), On 'Indirect' Trade-related R&D Spillovers, World Bank, Washington, D.C., Mimeo.
Lyles, M.A. and J.E. Salk (1996), “Knowledge Acquisition from Foreign Parents in IJVs: An Empirical Examination in the Hungarian Context”, Journal of International Business Studies, 29: 154 -174.
Mairesse, J. and P. Mohnen (2006), “The Importance of R&D for Innovation: A Reassessment using French Survey Data”, NBER Working paper No. 10897.
Martinez, J. and J.C. Jarillo (1991), “Coordination Demands of International Strategies”, Journal of International Business Studies, 22: 429-444.
Molero J. and J. Heys (2002), “Differences in Innovative Behaviour between National and Foreign Firms: Measuring the Impact of Foreign Firms on National Innovation Systems”, International Journal of Entrepreneurship and Innovation Management, 2: 2-3.
Moran, T. (1998), “Foreign Direct Investment and Development”, Washington, D.C.: Institute for International Economics.
Moran, T. (2005), “How Does Foreign Direct Investment Affect Host Country Development: Do We Already Know the Answer? Using Industry Case Studies to Make Reliable Generalizations”, In T. Moran, E. Graham and M. Blomström eds., Does Foreign Direct Investment Promote Development? Washington, D.C.: Institute for International Economics. 281-314.
Mudambi, R. (1999), “MNE Internal Capital Markets and Subsidiary Strategic Independence”, International Business Review, 8: 197–211.
OECD (2008), “Recent Trends in the Internationalisation of R&D in the Enterprise Sector”, DSTI/EAS/IND/SWP(2006)1/FINAL. Paris: OECD, Directorate for Science, Technology and Industry.
Pearce, R. (1999), “The Evolution of Technology in Multinational Enterprises: The Role of Creative Subsidiaries”, International Business Review, 8: 125-148.
Perez, T. (1998), “Multinational Enterprises and Technological Spillovers”, Amsterdam: Harwood Academic Publishers.
Radnor, M. (1991), “Technology acquisition strategies and processes: a reconsideration of the make versus buy decision”, International Journal of Technology Management, 6, 113-135.
Romer, P.M. (1990), “Endogenous Technological Change”, Journal of Political Economy, 98, S71-S102. 28
Rugman, A.M. and S. Douglas (1986), “The Strategic Management of Multinationals and World Product Mandating”, Canadian Public Policy, 12 (2): 320-328.
Sanna-Randaccio, F. and R. Veugelers (2003), “Global Innovation Strategies of MNEs: Implications for Host Economies”, In J. Cantwell and J. Molero (eds.), Multinational Enterprises, Innovative Strategies and Systems of Innovation. Cheltenham: Edward Elgar. p.p.: 14-46.
Sgard, J. (2001), “Direct Foreign Investments and Productivity Growth in Hungarian Firms”, 1992-1999. Document de travail No. 01.19. Paris: CEPII - Centre d'edutes prospectives et d'informations internationales.
Smarzynska, B.K. (2003), “Does Foreign Direct Investment Increase the Productivity of Domestic Firms?” In Search of Spillovers through Backward Linkages. William Davidson Working Paper No. 548. Ann Arbor: University of Michigan Business School.
Smarzynska Javorcik, B. and M. Spatareanu (2006), To Share or Not To Share: Does Local Participation Matter for Spillovers from Foreign Direct Investment? Mimeo.
Smeets, R. and A. de Vaal (2006), Knowledge Spillovers and FDI Ownership. Nijmegen School of Management, Radboud University Nijmegen, Nijmegen. Mimeo.
Steensma, H.K. and M.A, Lyles (2000), “Explaining IJV Survival in a Transition Economy through Social Exchange and Knowledge-Based Perspectives”, Strategic Management Journal, 21: 831-851.
Taggart, J. and N. Hood (1999), “Determinants of Autonomy in Multinational Corporation Subsidiaries”, European Management Journal, 22: 237-250.
Teece, D.J., G. Pisano and A. Shuen (1997), “Dynamic Capabilities and Strategic Management”, Strategic Management Journal, 18: 509-533.
Toth, I. and A. Semjen (1999), “Market Links and Growth Capacity of Enterprises in a Transforming Economy: The Case of Hungary”, In I.J. Toth and A. Semjen eds., Market Links, Tax Environment and Financial Discipline of Hungarian Enterprises. Budapest: Institute of Economics, Hungarian Academy of Sciences. Tytell, I. and K. Yudaeva (2005), “The Role of FDI in Eastern Europe and New Independent States: New Channels for the Spillover Effect”, Working Paper No. 60. Center for Economic and Financial research (CEFIR), Moscow.
UNCTAD (2000), World Investment Report 2000, Geneva: United Nations.
UNCTAD (2001), World Investment Report 2001, Geneva: United Nations.
Van Biesebroeck, J. (2003), “Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants”, NBER Working Paper No. 10020.
Vernon, R. (1966), “International Investment and International Trade in the Product Cycle”, Quarterly Journal of Economics, 80: 190-207.
Veugelers, Reinhilde. (1997), “Internal R&D expenditures and external technology sourcing”, Research Policy, 26 (1997): 303-315.
Veugelers, Reinhilde and Bruno Cassiman (1999), “Make and buy in innovation strategies: evidence from Belgian manufacturing firms”, Research Policy, 28: 63-80.
Walsh, S., J. Linton, R. Boylan, and C. Sylla (2002), “The Evolution of Technology Management Practice in Developing Economies: Findings from Northern China”, International Journal of Technology Management, 24 (2/3): 311-329.
White, R. E. and T. A. Poynter (1984), “Strategies for Foreign-Owned Subsidiaries in Canada”, Business Quarterly, 49(2): 59-69.
Williamson, O. E. (1975), “Markets and Hierarchies: Analysis and Antitrust Implications” New York: Free Press. 29
Williamson, O.E. (1981), “The Modern Corporation: Origins, Evolution, Attributes”, Journal of Economic Literature, 19: 1537-1568.
Williamson, O.E. (1985), “The Economic Institutions of Capitalism”, New York: Free Press.
Xu, B. (2000), “Multinational Enterprises, Technology Diffusion, and Host Country Productivity Growth”, Journal of Development Economics, 62: 477-493.
Xu, B. and J. Wang (1999), “Capital Goods Trade and R&D Spillovers in the OECD”, Canadian Journal of Economics, 32: 1258-1274.
Young, S., N. Hood and S. Dunlop (1988), “Global strategies, multinational subsidiary roles and economic impact in Scotland”, Regional Studies, 22 (6): 487-497.
Young, S. and A.T. Tavares (2004), “Centralization and Autonomy: Back to the Future”, International Business
|Deposited On:||23 Jun 2010 12:55|
|Last Modified:||24 Mar 2011 10:45|
Repository Staff Only: item control page