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Inward FDI and local innovative performance. An empirical investigation on Italian provinces

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  • Andrea Ascani
  • Luisa Gagliardi

Abstract

Do knowledge externalities from FDI foster local innovative performance? Employing manufacturing data for the period 2001–2006 this paper investigates the impact of inward FDI on the generation of innovation. Adopting a Knowledge Production Function approach (KPF), we find that in the case of Italian provinces the presence of foreign investment is beneficial for the innovative performance of recipient economies. These results are robust to a number of checks adding new evidence to the literature on FDI impact. In terms of policy consideration, this implies that a structured policy for the attraction of external capital might channel external sources of knowledge to complement local capabilities. Copyright Springer-Verlag Berlin Heidelberg 2015

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  • Andrea Ascani & Luisa Gagliardi, 2015. "Inward FDI and local innovative performance. An empirical investigation on Italian provinces," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 35(1), pages 29-47, February.
    • Handle: RePEc:spr:jahrfr:v:35:y:2015:i:1:p:29-47
    DOI: 10.1007/s10037-014-0084-2
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    Cited by:

    1. Gagliardi, Luisa, 2019. "The impact of foreign technological innovation on domestic employment via the industry mix," Research Policy, Elsevier, vol. 48(6), pages 1523-1533.
    2. Andrea Ascani & Riccardo Crescenzi & Simona Iammarino, 2015. "Economic Institutions and the Location Strategies of European Multinationals in their Geographical Neighbourhood," LEQS – LSE 'Europe in Question' Discussion Paper Series 97, European Institute, LSE.
    3. Nicola Cortinovis & Riccardo Crescenzi & Frank van Oort, 2020. "Multinational enterprises, industrial relatedness and employment in European regions [Innovation: mapping the winds of creative destruction]," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1165-1205.
    4. Michael Beenstock & Daniel Felsenstein & Ziv Rubin, 2017. "Does foreign direct investment polarize regional earnings? Some evidence from Israel," Letters in Spatial and Resource Sciences, Springer, vol. 10(3), pages 385-409, October.
    5. Andrea Ascani & Riccardo Crescenzi & Simona Iammarino, 2016. "Economic Institutions and the Location Strategies of European Multinationals in their Geographic Neighborhood," Economic Geography, Taylor & Francis Journals, vol. 92(4), pages 401-429, October.
    6. Massimiliano Porto, 2024. "Spatial distribution of Japanese affiliates in Italy: a dynamic geo-spatial network analysis," Asia Europe Journal, Springer, vol. 22(3), pages 269-291, September.
    7. Aronica, Martina & Fazio, Giorgio & Piacentino, Davide, 2022. "A micro-founded approach to regional innovation in Italy," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    8. Jonas Kleineick & Andrea Ascani & Martijn Smit, 2020. "Multinational investments across Europe: a multilevel analysis," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 40(1), pages 67-105, April.
    9. Roberto Ganau & Andrés Rodríguez†Pose, 2018. "Industrial clusters, organized crime, and productivity growth in Italian SMEs," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 363-385, March.
    10. Michael Beenstock & Daniel Felsenstein, 2021. "A Solution for Absent Spatial Data: The Common Correlated Effects Estimator," International Regional Science Review, , vol. 44(3-4), pages 466-484, May.
    11. Riccardo Crescenzi & Simona Iammarino & Carolin Ioramashvili & Andres Rodriguez-Pose & Michael Storper, 2019. "The Geography of Innovation: Local Hotspots and Global Innovation Networks," WIPO Economic Research Working Papers 57, World Intellectual Property Organization - Economics and Statistics Division.
    12. Andrea Ascani & Simona Iammarino, 2018. "Multinational enterprises, service outsourcing and regional structural change," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(6), pages 1585-1611.
    13. Nicola Cortinovis & Riccardo Crescenzi & Frank van Oort, 0. "Multinational enterprises, industrial relatedness and employment in European regions," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1165-1205.
    14. Boying Li & Chun‐Ping Chang & Mingbo Zheng, 2021. "Assessment of innovation and foreign direct investment: An investigation of OECD countries," Pacific Economic Review, Wiley Blackwell, vol. 26(3), pages 392-403, August.
    15. Ascani, Andrea & Balland, Pierre-Alexandre & Morrison, Andrea, 2020. "Heterogeneous foreign direct investment and local innovation in Italian Provinces," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 388-401.
    16. Ascani, Andrea & Gagliardi, Luisa, 2020. "Asymmetric spillover effects from MNE investment," Journal of World Business, Elsevier, vol. 55(6).
    17. Vissa, Siva Kameswari & Thenmozhi, M., 2022. "What determines mergers and acquisitions in BRICS countries: Liquidity, exchange rate or innovation?," Research in International Business and Finance, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    Technological change; Foreign direct investment; Regional development; Globalization; O3; F23; R11; F63;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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