Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259534 
Year of Publication: 
2022
Series/Report no.: 
wiiw Working Paper No. 213
Publisher: 
The Vienna Institute for International Economic Studies (wiiw), Vienna
Abstract: 
The beneficial effects of innovation for firms' performance and competitiveness are well documented, but it has been suggested in recent years that innovation regimes differ between advanced and emerging economies. While advanced economies rely on knowledge generation, their emerging counterparts follow mainly a knowledge-use regime through the application of existing knowledge and technology. Climbing up the technological ladder can be helped through spillovers from foreign investors to local firms. We investigate whether FDI spillovers influence different phases of the innovation process (from decision to innovate to productivity) among knowledge-using and knowledge-creating firms in an emerging European economy. The results show that the innovation process in emerging economies is closer to the imitation than the creation of novel products. Local firms benefit from foreign counterparts in the early phase of the innovation process. Stronger FDI effects are found among firms that undertake innovation through knowledge use rather than through knowledge generation.
Subjects: 
knowledge use
knowledge generation
FDI
innovation
emerging economy
JEL: 
F21
F23
L25
C31
L21
Document Type: 
Working Paper

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