Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/79238
Authors: 
Uzagalieva, Ainura
Koécenda, Evézen
Menezes, Antonio
Year of Publication: 
2012
Series/Report no.: 
IOS Working Papers 312
Abstract: 
We analyze the role of innovation in the technological development of four new EU members: the Czech Republic, Hungary, Poland and Slovakia. For that purpose, we use a novel approach by modeling the empirical relationship between intra-industrial bilateral trade flows, which proxy the level of technological progress, and innovation expenditures within the context of a gravity model with a set of appropriate instrumental variables to account for the potential endogeneity of innovation to trade. We show that innovation efforts in high-tech industries exhibit a strong effect on the technological progress of the region and they are closely linked to foreign direct investment and multinationals. As foreign-owned subsidiaries become a part of the innovation systems and industrial structure of the host country they promote overall technological growth in the region.
JEL: 
C51
F14
F21
O31
Document Type: 
Working Paper

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