Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39011
Authors: 
Uzagalieva, Ainura
Kocenda, Evézen
Menezes, Antonio
Year of Publication: 
2010
Series/Report no.: 
CESifo Working Paper 3039
Abstract: 
We analyze the role of imitation and innovation in promoting technological progress in new members of European Union: the Czech Republic, Hungary, Poland and Slovakia. The two modes of technological development-innovation and imitation-are distinguished from one another by identifying the dominant orientation of innovation efforts at the industry level. Specific industry features and the origin, structure and size of foreign direct investments in these countries are utilized for this purpose. The empirical relationship between intra-industrial bilateral trade flows, which proxy the level of technological progress, and innovation expenditures is analyzed using a gravity model. During the estimation stage, we use appropriate instruments to account for the potential endogeneity of innovation to trade. The results reveal the important role of foreign direct investment and multinationals in the technological progress of the region. Specifically, technological progress that is due to innovation is driven mainly by affiliates of foreign firms and multinationals.
Subjects: 
foreign direct investment
innovation
imitation
international trade
European Union
JEL: 
C51
F14
F21
O31
Document Type: 
Working Paper

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