PurposeThe aim of this paper is to study the linkages between inward and outward foreign direct investment (FDI) and the innovation inputs and outputs of domestic and foreign owned companies in Estonia, a small economy in CEE.Design/methodology/approachThe econometric analysis of the data about the linkages between FDI and innovation is made using the model by Crépon et al., which allows estimation of the innovation expenditure equation, the knowledge production function (with various innovation output variables as dependent variables) and the productivity equation (production function), with all the equations including company and industry level FDI variables.FindingsThe results show that the higher innovation output of foreign owned companies vanishes after various company characteristics are controlled for, but there were significant differences in innovation inputs such as the higher use of knowledge sourcing and the lower importance of various impeding factors. Outward investment has a positive influence on innovativeness among both domestic and foreign owned companies.Practical implicationsThe managers can benefit from this study by tapping into a wider range of knowledge sources via diverse and active involvement in exporting and investing activities. Often they fail to realise that initiation of international activities can also serve as an important learning opportunity in becoming more innovative. The policy implications suggest that government policies as well as triple helix cooperation should be oriented not only towards attracting foreign interest, but also towards building opportunities for more extensive regional and international business networking by exporting and outward FDI.Originality/valueThe originality of the study lies in the usage of the data from a small open economy of Central and Eastern Europe. This region is a good candidate for studying the impacts of FDI; while CEE countries were closed to FDI before the onset of transition, since the beginning of transition they have witnessed massive FDI inflows. The present study seems to be one of the first ones to use three different waves of the Community Innovation Survey (CIS), specifically CIS3 covering 1998‐2000, CIS4 (2002‐2004) and CIS2006 (2004‐2006). Thereby the authors are able to study the impact of the changing economic environment on the link between FDI and innovativeness.
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. AbstractPurpose -The purpose is to show the interconnections between the management style of an internationally expanding company and the pattern of its network connections, while incorporating the company size and corporate traditions as secondary determinants. Design/methodology/approach -The paper uses multiple case study analysis. Included case studies characterise the various management attitudes of Estonian companies in engaging in international inter-company relationships. To allow for the generalisation of results, the cases analyse the companies from several sectors and size groups. Findings -Research concludes that the decision to participate in an international network could be made either because of socio-economic circumstances or as the innovative entrepreneurial choice toward more rapid expansion. Thus, the paper views certain decisions of a company about its relationships with other agents, including suppliers and competitors, as entrepreneurial choices made by its general management. This research also categorises these choices as irreversible and temporary and positions company size and traditions as secondary factors, besides management style, which are important in determining the usage of relational support.Research limitations/implications -The case study analysis might fail to illuminate the most archetypical features that could be generalized to all similar companies. Thus, one should exercise extreme caution when generalizing given results. In the case of qualitative research, the danger of misinterpretation of facts or events is bigger than in the case of quantitative research. The methodological variations make it more difficult to bring in cause and effect patterns. Practical implications -These results imply the role and authority of an entrepreneur not only in multinational or ownership-based networks but also in solely relational networks. This issue at present is not the subject of the research focus. The managers should also increasingly account for the impact of entrepreneurial management style in the corporate setting of takeovers and partnerships. Thus, innovative choices might achieve an increasingly important role in the formation of industrial networks. Originality/value -This paper establishes the position of entrepreneurial management style as a determinant of partnership contacts, while controlling for company size and its management traditions. It offer...
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