Inward Foreign Direct Investment and National Innovative Capacity

Abstract

A remarkable increase in the attention devoted to national innovative capacity (NIC) has been noticed over the last decades. There is a strong debate whether a country’s national innovative capacity is entirely determined by local effects or it is also influenced by global network position and international economic activities. Furthermore, despite its’ importance, there is a lack of studies which take the variables of non-technological innovation into account. This paper aims to fill the empirical research gap by focusing on inward foreign direct investment as an input of NIC and engaging non–technological innovation as an output in NIC models. An investigation of 28 European Union (EU) Member States in the period of 2013-2016 shows that EU has a great intellectual capacity of human capital which drives both technological and non-technological innovation. The regression analysis revealed that the international transmission of knowledge through inward FDI and import boost the employment in knowledge-intensive sectors and has a positive effect on trademark and design applications. The findings thus help to better understand the role of international economic activities in enhancing national innovative capacity and facilitate EU efforts to catch up with the strongest innovators in the World.

Does Foreign Direct Investment Boost Innovation? The Case of the Visegrad and Baltic Countries

“…In the first step, in line with previous studies addressing similar issues (e.g. Qu et al, 2013;Arun and Yildirim, 2017;Andrijauskiene and Dumčiuvienė, 2019), the regression analysis using panel data was performed with SII as a key dependent variable, for the period 2009 to 2016. As key independent variables, we used the volume of FDI inflows (IFDI) and outflows (OFDI), values of which were taken from the UNCTADSTAT (2020).…”

Foreign Direct Investment and Carbon Emission Efficiency: The Role of Direct and Indirect Channels

“…This proved the pollution halo effect. Andrijauskiene and Dumiuvien [25], Ghebrihiwet [26] and Melane-Lavado, and Álvarez-Herranz [27] found that there was a positive relationship between FDI and technological innovation. Some scholars also found that FDI negatively influences technological innovation in the host countries and sometimes even has no influence.…”

Do International Capital Flows, Institutional Quality Matter for Innovation Output: The Mediating Role of Economic Policy Uncertainty

“…Besides, FDI can bring spillover effects and eliminate externalities effects, thus accelerating technological progress and innovative activities in the economy. A study conducted by Andrijauskiene and Dumčiuvien ė [52] to assess foreign investment's existing controversy boosted national innovation capacity in the economy. The study utilized a total of 28 European countries for the period 2013-2016.…”