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Knowledge Spillovers, the Technology Frontier and High-Tech FDI - Evidence from Finland

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  • Elina Berghäll

    (VATT Institute for Economic Research)

Abstract

The link between foreign direct investment (FDI) and the technology frontier is strong in the theoretical and empirical literature, particularly for high-tech multinational corporations. Policymakers aiming to harness local high-tech clusters therefore tend to cherish high-tech inward FDI. It is not clear whether they should. With an unbalanced panel of Finnish ICT manufacturing firms for 1993–2003, I identify the direction of knowledge spillovers by comparing the technical efficiencies of foreign and indigenous firms with DEA and order-m methodology. When knowledge spillovers flow predominantly to foreign firms, innovation policy seeking to accelerate them may accelerate the net loss of strategic assets.

Suggested Citation

  • Elina Berghäll, 2017. "Knowledge Spillovers, the Technology Frontier and High-Tech FDI - Evidence from Finland," Finnish Economic Papers, Finnish Economic Association, vol. 28(1), pages 34-49, Autumn.
    • Handle: RePEc:fep:journl:v:28:y:2017:i:1:p:34-49
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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