Home Country Innovation Performance: Moderating the Local Knowledge and Inward Foreign Direct Investment

2020 ◽  
pp. 097215092092077
Author(s):  
Marco Túlio Dinali Viglioni ◽  
Cristina Lelis Leal Calegario
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Import Substitution ◽  
Generalized Method Of Moments ◽  
Foreign Market ◽  
Innovation Performance ◽  
Policy Implications ◽  
Technology Acquisition ◽  
Inward Foreign Direct Investment

The inward foreign direct investment (FDI) has been emphasized in the literature, and although the benefits related to innovation are known, there is not much information about their effects on emerging economies. This study investigates how local domestic factors such as research and development (R&D), exports and foreign technology acquisition moderate with inward FDI to improve the innovation performance. The empirical findings from a generalized method of moments (GMM) estimator suggest, at short term, that the FDI has a positive effect in the Brazilian manufacturing industry. As a complementary effect, there is an interaction between FDI inflows and exports, increasing the innovation performance. However, improvements in R&D-related FDI is not observed. For this reason, the results suggest FDI-related exports could indicate a mere product adaptation to the foreign market. There is a predominance in import substitution of machines, equipment and software and no evidence of internal R&D investments or R&D-related FDI. Our results suggest managerial and policy implications, once it was observed the high-technology intensity industry sectors show better innovation performance than medium- and low-technology industries. Policymakers should implement better policies to encourage more R&D-related FDI to decrease import substitution and improve the local innovation performance to strengthen the local industry R&D investments.

scholarly journals Empirical Study of the Impact of Outward Foreign Direct Investment on Water Footprint Benefit in China

2019 ◽  
Vol 11 (16) ◽  
pp. 4409 ◽  
Author(s):  
Daxue KAN ◽  
Weichiao HUANG
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Water Footprint ◽  
Social Economic ◽  
Generalized Method Of Moments ◽  
Economic Benefits ◽  
Environmental Benefits ◽  
Policy Implications ◽  
Outward Foreign Direct Investment ◽  
Different Types

How to enhance the water footprint benefit in conjunction with outward foreign direct investment (OFDI) is of great significance to reconcile the contradiction between supply and demand of water resources. This paper examines the effect of OFDI on the water footprint benefit using system GMM (Generalized Method of Moments) on a dynamic panel data. The results revealed that, in general, OFDI was not conducive to enhancing social, spatial, and environmental benefits of China’s water footprint, but was conducive for improving water footprint economic benefits. The results also showed that different types of OFDI exert differential effects on water footprint benefits. Specifically, the market-seeking and resource-seeking types of OFDI are not conducive for enhancing social and spatial benefits of China’s water footprint, but have improved (although not significantly) economic benefits of the water footprint. However, the market-seeking type of OFDI is conducive for improving environmental benefits of the water footprint, while the resource-seeking OFDI is not conducive for improving environmental benefits of the water footprint. In addition, the technology-seeking OFDI is conducive to the social, economic, spatial, and environmental benefits of China’s water footprint. Furthermore, the path-wise OFDI (investing in developing countries) is not conducive to enhancing social, spatial, and environmental benefits of China’s water footprint, but has improved (although not significantly) the economic benefits of China’s water footprint. On the other hand, the inverse OFDI (investing in developed countries) is conducive to China’s water footprint including its social, economic, spatial, and environmental benefits. The findings from this study have relevant policy implications and can help provide some policy prescriptions for an economy such as China to engage in OFDI and enhance water footprint benefits. For instance, in addition to expanding market-seeking and resource- seeking OFDI, China should actively increase the scale of technology-seeking OFDI. In addition, while continuing to expand path-wise OFDI, China should further increase the scale of inverse OFDI. By taking advantage of the complementary and synergetic effects of different types of OFDI, an economy can capture the whole effects of OFDI to reap the water footprint’s full social, economic, spatial, and environmental benefits.

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

2020 ◽  
Vol 24 (3) ◽  
pp. 106
Author(s):  
Aneta Bobenič Hintošová ◽  
Michaela Bruothová ◽  
Iveta Vasková
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Innovation Performance ◽  
Policy Implications ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Baltic Countries ◽  
Panel Data Regression ◽  
Short Period ◽  
The Impact

<p><strong>Purpose:</strong> The purpose of the paper is to examine the impact of inward and outward foreign direct investment on innovation performance of the Visegrad and Baltic countries.</p><p><strong>Methodology/Approach:</strong> The study follows an open-system approach to consider the determinants of national innovation performance, taking into account both inward and outward FDI. We use two-step analysis that combines panel data regression analysis with the design of two FDI – innovation performance matrixes.</p><p><strong>Findings:</strong> The results of the study provide evidence that only outward foreign direct investment of domestic firms contributes significantly to the innovation performance of these countries and that this effect is more visible in the case of the Visegrad countries.</p><p><strong>Research Limitation/Implication:</strong> The limitations of the study are associated in particular with the selection of SII as a measure of national innovation performance. The use of this indicator is also related to the relatively short period of availability of consistent data, especially in connection with changes in the methodology of SII calculation.</p><strong>Originality/Value of paper:</strong> The policy implications of the paper suggest the need for stronger support of domestic bearers of cross-border capital movements in an attempt to boost national innovation performance.

scholarly journals Investment promotion in the South African manufacturing industry: incentive comparisons with Malaysia and Singapore

2014 ◽  
Vol 17 (3) ◽  
pp. 319-335 ◽  
Author(s):  
Martha SI Wentzel ◽  
Maxi Steyn
Keyword(s):  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
The South ◽  
Short Term ◽  
Foreign Investors ◽  
Investment Promotion ◽  
Inward Foreign Direct Investment

South Africa needs to increase its inward foreign direct investment in order to achieve economic growth. The purpose of this article is to explore which intervention could be launched in the short term to enhance the country's attractiveness for foreign investors. The findings of the literature review demonstrated that incentives, as a determinant of investment, are the short-term intervention with the most significant potential to attract additional foreign direct investment. A comparative study, which provided insight into the incentives that are currently offered to the manufacturing sectors of three countries (South Africa, Malaysia and Singapore), assisted in identifying two additional incentives that the South African government could introduce and three existing incentives that could be amended. The introduction or modification of these incentives could ensure that South Africa has a competitive advantage to attract investment from foreign investors and thereby increase South Africa's inward foreign direct investment in the manufacturing industry.

scholarly journals Determinants of FDI in Czech Manufacturing Industries between 2000-2007

2010 ◽  
Vol 5 (2) ◽  
pp. 21-32 ◽  
Author(s):  
Eva Michalíkovń ◽  
Elisa Galeotti
Keyword(s):  
Foreign Direct Investment ◽  
Czech Republic ◽  
Direct Investment ◽  
Fixed Effects ◽  
Manufacturing Industry ◽  
Econometric Model ◽  
Generalized Method Of Moments ◽  
Manufacturing Industries ◽  
The Czech Republic ◽  
Determinants Of Fdi

Determinants of FDI in Czech Manufacturing Industries between 2000-2007The Czech Republic (and its manufacturing industry) has been a successful recipient of foreign direct investment over recent years. Therefore, it is important to understand the decisions made by foreign investors where to place their investments and how to decide on their location between alternative industries. The aim of this paper is to find and estimate an econometric model describing the determinants of foreign direct investment (FDI) in the manufacturing industry of the Czech Republic between 2000-2007 and to make a review of recent literature on the topic. The econometric model includes several economic variables (for example labor, physical capital, R&D, profits per labor, Balassa index). Together with simple techniques of estimation (OLS, fixed effects) we used a generalized method of moments (GMM). In an effort to improve the result we used also a least trimmed squares estimator (LTS) from the class of robust estimators as a diagnostic tool for the heterogeneous pattern of data.

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