Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/29965
Authors: 
Günther, Jutta
Jindra, Björn
Stephan, Johannes
Year of Publication: 
2008
Series/Report no.: 
IWH Discussion Papers 4/2008
Abstract: 
This paper analyses the extent of technological capability of foreign subsidiaries located in East Germany, and looks at the determinants of foreign subsidiaries' technological sourcing behaviour. The theory of international production underlines the importance of strategic and regional level variables. However, existing empirical approaches omit by and large regional level factors. We employ survey evidence from the "FDI micro database" of the IWH, that was only recently made available, to conduct our analyses. We find that foreign subsidiaries are above average technologically active in comparison to the whole East German manufacturing. This can be partially explained by the industrial structure of foreign direct investment. However, only a limited share of foreign subsidiaries with R&D and/or innovation activity source technological knowledge from the East German innovation system. If a subsidiary follows a competence augmenting strategy or does local trade, it is more likely to source technological knowledge locally. The endowment of a region with human capital and a scientific infrastructure has a positive effect too. The findings suggest that foreign subsidiaries in East Germany are only partially linked with the regional innovation system. Policy implications are discussed.
Subjects: 
East Germany
Regional Innovation System
Foreign Direct Investment
JEL: 
O30
O38
F20
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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