Reverse Productivity Spillovers in the OECD: The Contrasting Roles of R&D and Capital

2016 ◽  
Vol 16 (1) ◽  
pp. 113-133 ◽  
Author(s):  
Peter Zámborský ◽  
Elena J. Jacobs
Keyword(s):  
Capital Investment ◽  
Multinational Enterprises ◽  
Developed Countries ◽  
Foreign Firms ◽  
The Czech Republic ◽  
Level Data ◽  
Foreign Affiliates ◽  
Knowledge Seeking ◽  
The Relationship ◽  
D Investment

This paper analyzes the relationship between research and development (R&D) and capital investment by domestic firms and the productivity of foreign affiliates of multinational enterprises in developed countries. We explain why “reverse spillovers” from domestic to foreign firms might differ when R&D and capital are considered as two separate channels. Using industry-level data for eight Organisation for Economic Co-operation and Development (OECD) economies (including the Czech Republic and Slovakia) in 2001–2007, we find robust evidence that R&D investment by local firms is positively associated with the productivity of affiliates of foreign firms. Our findings and theory add to the relatively scarce research on reverse spillovers and contribute to the literature on knowledge-seeking foreign direct investment (FDI).

scholarly journals Does Road Investment Really Promote the Export? Evidence from Sichuan County-level Data of China

2018 ◽  
Vol 10 (2) ◽  
pp. 197
Author(s):  
Lihe Xu ◽  
Jiaqi Liu ◽  
Xiaoshan Yan
Keyword(s):  
Capital Investment ◽  
Service Sector ◽  
Manufacturing Sector ◽  
Private Capital ◽  
County Level ◽  
Road Infrastructure ◽  
The Road ◽  
Level Data ◽  
Tradable Sector ◽  
The Relationship

Whether road infrastructure promotes export is still a concerned issue debated in the previous studies. In this paper, we conduct a panel data using two data sources from year 2003 to 2013, examining the relationship between road investment and export. The primary results show that road investment significantly restricts local export. A further test indicates that the road infrastructure benefits service sector, 1) abstract more private capital investment on service sector than manufacturing sector, 2) reduce the employee of tradable sector. Then manufacturing sector was constrained. The results are robust when a set test is carried out.

Innovation Network in IT Sector

2014 ◽  
pp. 148-170 ◽  
Author(s):  
Swapan Kumar Patra
Keyword(s):  
Developing Countries ◽  
Multinational Enterprises ◽  
Multinational Firms ◽  
Innovation System ◽  
Developed Countries ◽  
Foreign Firms ◽  
Home Base ◽  
Recent Trends ◽  
Innovation Mode ◽  
The Developed Countries

Multinational Enterprises usually keep their crucial R&D close to their home base. However, recent trends show that MNEs are increasingly offshoring their R&D activities. A couple of decade ago this R&D offshoring phenomenon was mainly restricted in the developed countries. Since early 1990’s this paradigm has changed and many Multinational firms prefer developing countries as their R&D destination. Among developing countries, India and China are favorable destinations for many MNEs. The R&D alliance trends of foreign firms show that, in India they prefer Indian domestic firms and in China, they prefer universities and government research institutes. Government of both these countries should take policy measures to strengthen the linkages between foreign firms and local actor of innovation system. Also, innovation is no longer restricted to or confined within a firm’s border. Firms are acquiring knowledge from outside its boundary by “Open Innovation Mode.”

scholarly journals Globalization and Innovation in Emerging Markets

2010 ◽  
Vol 2 (2) ◽  
pp. 194-226 ◽  
Author(s):  
Yuriy Gorodnichenko ◽  
Jan Svejnar ◽  
Katherine Terrell
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Foreign Firms ◽  
Foreign Competition ◽  
Domestic Firms ◽  
Service Sectors ◽  
Using Data ◽  
The Relationship ◽  
Robust Evidence

Globalization brings opportunities and pressures for domestic firms in emerging markets to innovate and improve their competitive position. Using data from 27 emerging market economies, we estimate the effects of foreign competition and linkages with foreign firms on innovation by domestic firms. We provide robust evidence of a positive relationship between foreign competition and innovation, broadly defined. The supply chain of multinational enterprises and trade are also important channels. There is no evidence for an inverted U relationship between innovation and foreign competition. Moreover, the relationship between globalization and innovation does not differ across the manufacturing and service sectors. (JEL F02, F23, M16, O33)

scholarly journals Do local start-ups and knowledge spillovers matter for firm-level R&D investment?

Urban Studies ◽  
2021 ◽  
pp. 004209802199510
Author(s):  
Frank Crowley ◽  
Declan Jordan
Keyword(s):  
Knowledge Spillovers ◽  
Negative Association ◽  
Firm Level ◽  
Firm Formation ◽  
New Firm Formation ◽  
Level Data ◽  
New Firm ◽  
Start Ups ◽  
The Relationship ◽  
D Investment

What happens to firm-level research and development (R&D) when urban locations have more knowledge spillovers and are more entrepreneurial? This article explores the potential tension between knowledge spillovers, start-ups and innovation effort in existing firms. The relationship is empirically tested using Swedish firm-level data and municipality-level data on start-ups. The results indicate that having more start-ups in urban municipalities is associated with lower firm-level R&D expenditure. However, this relationship is not linear, where the negative association between the level of new firm formation and firm-level R&D expenditure decreases with scale. This suggests that the relationship between local entrepreneurship and a business’ R&D decisions is conditioned by the extent of that entrepreneurship.

scholarly journals Innovation Network in IT Sector

Economics ◽  
2015 ◽  
pp. 321-343
Author(s):  
Swapan Kumar Patra
Keyword(s):  
Developing Countries ◽  
Multinational Enterprises ◽  
Multinational Firms ◽  
Innovation System ◽  
Developed Countries ◽  
Foreign Firms ◽  
Home Base ◽  
Recent Trends ◽  
Innovation Mode ◽  
The Developed Countries

Multinational Enterprises usually keep their crucial R&D close to their home base. However, recent trends show that MNEs are increasingly offshoring their R&D activities. A couple of decade ago this R&D offshoring phenomenon was mainly restricted in the developed countries. Since early 1990's this paradigm has changed and many Multinational firms prefer developing countries as their R&D destination. Among developing countries, India and China are favorable destinations for many MNEs. The R&D alliance trends of foreign firms show that, in India they prefer Indian domestic firms and in China, they prefer universities and government research institutes. Government of both these countries should take policy measures to strengthen the linkages between foreign firms and local actor of innovation system. Also, innovation is no longer restricted to or confined within a firm's border. Firms are acquiring knowledge from outside its boundary by “Open Innovation Mode.”

Environmental impact of FDI – the case of US subsidiaries

2019 ◽  
Vol 27 (3) ◽  
pp. 226-246 ◽  
Author(s):  
João Paulo Cerdeira Bento ◽  
António Moreira
Keyword(s):  
Environmental Impact ◽  
Environmental Pollution ◽  
Multinational Enterprises ◽  
Recipient Country ◽  
Developed Countries ◽  
Environmental Benefits ◽  
Host Countries ◽  
Content Type ◽  
The Relationship ◽  
Developing And Developed Countries

Purpose This paper aims to examine how foreign direct investment (FDI) and firm-specific advantages (FSAs) of US multinational enterprises (MNEs) majority-owned subsidiaries affect environmental pollution in host countries. The research results contribute to helping managers and policymakers understand the environmental impact of MNEs activities, and encourage these firms to develop environmentally responsible management (ERM) as an element of their corporate social responsibility practice. Design/methodology/approach Panel data consisting of developing and developed countries spanning the years 2004 through 2014 are used. The dynamic panel generalised method of moments technique is implemented. This method avoids common estimation bias, such as endogeneity, heteroscedasticity and autocorrelation. Findings This paper finds that the direct environmental impacts of FDI vary significantly between the two groups of countries. The environmental benefits of FDI to the recipient country are achieved through capital and technology transfer. The study also reveals that R&D intensity moderates the relationship between FDI and environmental pollution in both developing and developed countries in such a way that environmental pollution decreases. Research limitations/implications Future research could explore the environmental impact of MNEs on host countries by considering both equity and non-equity entry modes. The findings offer some support to host government policies offering generous incentive packages to attract R&D investment to improve environmental pollution. This research raises questions as to the reasons corporations operating in developing and developed countries should pursue their ERM practices. Originality/value This research examines both the direct effect of FDI and the moderating effects of FSAs on the relationship between FDI and the environment. Although previous studies have already looked at the relationship between FDI and the environment, the moderating effect of FSAs is very under-developed in this relationship.

scholarly journals Drivers of Globalization of R&D Investment by U.S. Multinational Enterprises: Evidence from Industry-Level Data

2016 ◽  
Vol 8 (2) ◽  
pp. 51 ◽  
Author(s):  
Yixiao Zhou
Keyword(s):  
Multinational Enterprises ◽  
Positive Impact ◽  
The United States ◽  
Firm Level ◽  
Theoretical Understanding ◽  
Industry Level ◽  
Country Level ◽  
Level Data ◽  
D Investment ◽  
Industry Level Data

<p>Existing country-level and firm-level studies have shed light on the mechanisms driving the globalization of R&amp;D investment by multinational enterprises. However, there is a lack of industry-level evidence on this issue, which is much needed for the robustness of the theoretical and conceptual framework developed from country- and firm-level studies. Therefore, this study examines the determinants of overseas R&amp;D investment by multinational enterprises from a single country, the United States, using an industry-level panel dataset. This study covers U.S. multinational enterprises in seven two-digit-level North American Industry Classification System (NAICS) manufacturing industries in twenty-three countries over the period 1999-2008.</p>The empirical findings suggest that technology-seeking motive, technology-adaptation motive, and access to an abundant pool of researchers exert positive impact on the R&amp;D intensity of U.S.-based multinational enterprises in a host country. The roles of investment position, institutional quality and distance are not found to be robust. These findings are largely consistent with the current theoretical understanding on R&amp;D globalization by multinational enterprises. The findings point to the need for policies that strengthen domestic R&amp;D stock, enhance human capital endowment and support a domestic market that is open to the world in order to attract overseas R&amp;D investment by multinational enterprises.

Regional Cycles of Learning: Foreign Multinationals as Agents of Technological Upgrading in Less Developed Countries

10.1068/a3545 ◽  
2002 ◽  
Vol 34 (12) ◽  
pp. 2155-2173 ◽  
Author(s):  
Martina Fromhold-Eisebith
Keyword(s):  
Empirical Evidence ◽  
Developed Countries ◽  
Foreign Firms ◽  
Less Developed Countries ◽  
Spatial Clusters ◽  
Technological Learning ◽  
Know How ◽  
Positive Effects ◽  
Technology Firms ◽  
Foreign Affiliates

Within the debate about positive effects of foreign multinational branch plants on host regions in less developed countries questions of technological learning and upgrading rank at the top. This paper describes forces and mechanisms which, under favourable conditions, promote dissemination of know-how through the dynamics of regional cycles of learning. Enriching earlier insights into the local embedding of subsidiaries and processes of cumulative causation, it emphasises why and how agglom-erating branches of globally operating technology companies engage in upgrading their less developed locality: effects are triggered by a combination of increasing regional labour-cost pressure and corresponding reactions of firms which relate to their branch activities and affect the institutional framework. Two models of regional cycles of learning are introduced which depict crucial distinctions between spatial clusters of technology firms with and without foreign affiliates. Empirical evidence is provided by comparing two technology regions in developing Asia: Bangalore, India, and Bandung, Indonesia. Both are well endowed with universities, research institutions, and firms in technology sectors, but differ with regard to the presence of foreign firms, and accordingly, display divergent qualitative developments.

scholarly journals THE SPILLOVER EFFECTS OF FDI ON LABOR PRODUCTIVITY OF FIRMS: EVIDENCE FROM THE FIVE PRIORITY MANUFACTURING INDUSTRIES IN INDONESIA

2020 ◽  
Vol 28 (1) ◽  
pp. 1-16
Author(s):  
Martin Juda ◽  
Toshihiro Kudo
Keyword(s):  
Labor Productivity ◽  
Manufacturing Sector ◽  
Spillover Effects ◽  
Foreign Firms ◽  
Firm Level ◽  
Negative Results ◽  
Level Data ◽  
Backward Linkages ◽  
The Relationship ◽  
Local Firms

This study aims to investigate the effects of FDI spillover on labor productivity of the firms in the five priority manufacturing sector industries in Indonesia, namely food and beverages, textiles, wearing apparel and footwear, chemicals and pharmaceuticals, electronics, and automotive and transport equipment industries. Using unbalanced firm-level data from 2000 to 2015, we find positive spillover effects in the horizontal linkages, which measure the presence of foreign firms on the labor productivity of local firms in the same industry. However, the effects of FDI on the labor productivity of domestic in backward linkages shows negative results, which means foreign buyers fail to give benefits to domestic suppliers. Moreover, the relationship between foreign suppliers and domestic buyers in the forward linkages also show negative spillover effects. These findings are also in line when the analyses are disaggregated into each industry, except for the electronics industry. Based on the different results of the three linkages of spillover effects, our findings suggest that the FDI spillover has not provided comprehensive benefits for local firms.

Working capital and firm value in an emerging market

2015 ◽  
Vol 11 (1) ◽  
pp. 60-79 ◽  
Author(s):  
Shaista Wasiuzzaman
Keyword(s):  
Firm Value ◽  
Capital Investment ◽  
Emerging Market ◽  
Developed Countries ◽  
Ordinary Least Squares ◽  
Financing Constraints ◽  
Working Capital ◽  
Content Type ◽  
Capital Efficiency ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between working capital efficiency and firm value and the influence of financing constraints on this relationship. Design/methodology/approach – Data from 192 firms spanning a period of ten years (1999-2008) are used for this purpose and analyzed using the ordinary least squares regression technique. Findings – The study finds that improvements in working capital efficiency through reduction in working capital investment results in higher firm value. However, this relationship is influenced by the financing constraints faced by a firm. For financially constrained firms, working capital efficiency significantly increases firm value but it is found to be insignificant for unconstrained firms. Originality/value – To the author’s knowledge, this is the first study on the value of working capital in Malaysia or in any emerging market. Most studies on working capital valuation concentrate on developed countries and that too are only a handful. Hence this study contributes to the scarce literature on the valuation of working capital. This study also uses the model by Fama and French (1998) to evaluate the relationship between working capital and firm value, which has hardly been used in studies on working capital valuation.

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