Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128824
Authors: 
Falk, Martin
Falk, Rahel
Year of Publication: 
2006
Series/Report no.: 
WIFO Working Papers 275
Abstract: 
This paper addresses the question of whether foreign ownership matters regarding innovation intensity. It is well documented that foreign firms display lower innovation and R&D intensity than local firms do. However, (foreign) investors bear not only innovation performances in mind when making up their investment decisions. Unless factors such as firm size, labour productivity, skill and export intensity, sectoral affiliation and geographical area of operation are not properly controlled for, one is running the risk of comparing apples and oranges. To account for the selectivity bias we employ matching estimators when comparing the innovation intensity between domestic and foreign-owned firms. The observed gaps in innovation intensities do not only survive this matching test, but turn out higher as compared to the results that would have been derived from conventional regression analyses.
Subjects: 
Foreign ownership
Multinational firms
propensity score matching
innovation expenditures
Document Type: 
Working Paper

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